The opinion of the court was delivered by: John E. Miller, District Judge.
Plaintiffs filed their complaint against defendant in the
Circuit Court of Miller County, Arkansas, seeking to recover
damages resulting from an alleged breach of contract on the part
of the defendant.
Briefly stated, plaintiffs allege that the defendant had a
contract with the Arkansas State Highway Department covering
certain highway construction between Van Buren, Arkansas, and
Alma, Arkansas, in Crawford County; that they subcontracted to do
in its entirety part of the work included in the general contract
between defendant and the State; that one of the items of work to
be performed was the removing and resetting of shrubs in the
approximate quantity of 40; that under the prime contract
defendant was to be paid $1 each for removing and resetting said
shrubs, while under the subcontract plaintiffs were to be paid $5
per shrub by defendant.
That it developed that it was necessary to remove and reset
5,391 shrubs; that defendant under his prime contract and
plaintiffs under their subcontract were both entitled and
required to remove and reset said shrubs, regardless of any
overrun; that the Arkansas State Highway Department so construed
the prime contract and that defendant accepted said construction;
that plaintiffs proceeded to commence the removal and resetting
of said shrubs but that defendant refused to permit plaintiffs to
proceed with the work, and instead proceeded to do the work on
his own account, receiving therefor $5,391 under the prime
Plaintiffs allege that defendant's actions constituted a breach
of the subcontract, and that they are entitled to recover from
defendant the sum of $26,450, less the reasonable cost of
removing and resetting 5,290 shrubs. (101 of the 5,391 shrubs
were paid for by defendant at the rate of $5 each.) Plaintiffs
also allege that defendant is indebted to them in the sum of
$1,693.51 for other work done under the subcontract.
On January 18, 1954, the case was removed to the United States
District Court, Western District of Arkansas, Texarkana Division.
The defendant on January 27, 1954, filed an answer containing
a general denial of the allegations of plaintiffs' complaint. On
February 11, 1954, defendant filed an amended answer alleging
that both the prime contract and the subcontract provided for the
removal and resetting of ornamental shrubs in yards along the
right of way; that the 5,290 "shrubs" for which plaintiffs seek
damages were not in fact shrubs, but were potted plants and other
plants located in and near a greenhouse encroaching upon the
right of way; that said plants were not removed and reset within
the purview of the prime contract or the subcontract.
Defendant further alleges that plaintiffs refused to move said
plants and that defendants arranged for and accomplished the
moving of the same; that defendant in fact moved 4,818 potted
plants and 3,586 other small plants in and around the greenhouse,
and was allowed $5,290 as an estimated reasonable allowance for
moving said plants, which were not covered by the prime contract
or the subcontract.
On April 2, 1954, a pre-trial conference was had, and upon
motion of plaintiffs the case was transferred from the Texarkana
Division of the Western District of Arkansas to the Fort Smith
Division of said District.
After the case was transferred, another pre-trial conference
was had on May 5, 1954, and it was stipulated that defendant is
indebted to plaintiffs in the sum of $1,693.51 for work not
connected with the shrubs; that plaintiffs are in possession of
a check in said amount issued by defendant, but that plaintiffs
have not cashed said check because there appears thereon a
statement that it is a settlement in full.
On June 8, 1954, defendant filed a second amended answer,
repeating the allegations of his first amended answer, and
further alleging that plaintiffs are not entitled to recover
damages from him since they first breached the subcontract by
failing to provide labor and materials during the course of the
work, as required by said subcontract, and therefore cannot urge
a breach of contract on his part.
Upon the issues as made by the pleadings, the case was tried to
the Court, without a jury, on June 14 and 15, 1954, and at the
conclusion of the trial the parties were directed to file briefs
in support of their respective contentions.
The briefs have been received, and now the Court, having
considered the pleadings, ore tenus testimony of the witnesses,
depositions, stipulations, exhibits and briefs of the parties,
makes and files herein its findings of fact and conclusions of
law, separately stated.
The plaintiffs are each citizens and residents of the State of
The defendant is a citizen and resident of the State of
The amount in controversy, exclusive of interest and costs,
exceeds the sum of $3,000.
Sometime prior to September 16, 1950, the State of Arkansas
entertained bids for certain highway construction work between
Van Buren and Alma, Arkansas, said job being designated as
Arkansas State Highway Department Job No. 4333, Crawford County,
Arkansas. The defendant and plaintiffs were bidders on the job,
and had inspected the job site and the plans and profiles prior
to making their bids. Defendant was the successful bidder, while
plaintiffs were second low bidders.
The contract entered into between defendant and the State
contained the following relevant provisions:
"Proposal Schedule (Sheet 6)
"Item No. SP-1064-1, Approximate Quantity 40, Each
Removing and Resetting Shrubs at One Dollar and No
Cents per Each. Unit Price Bid 1.00. Amount Bid
"— Removing and Resetting Shrubs —
"This item shall consist of the removing and
resetting of shrubs, including rose bushes, in
accordance with these specifications and at locations
shown on the plans or as designated by the Engineer.
"A section of earth of sufficient area and depth to
assure the shrub living after it has been reset,
shall be removed intact with the roots and body of
the shrub. Each shrub shall be reset at a location
designated by the Engineer after the location has
been properly prepared by grading, loosening of
earth, excavating pit, removal of stone or any other
unsatisfactory materials, or by any other means
necessary to obtain a satisfactory root bed. The
shrub shall be carefully set in the new pit and
backfill made with suitable material, well tamped and
watered, and such other means shall be used in
transplanting as are necessary for the continued life
and growth of the shrub.
"In removing and resetting, care shall be taken to
prevent damage to the shrub and in case any shrub is
damaged through carelessness on the part of the
Contractor, it shall be replaced by him at his own
expense with a shrub equivalent to the one damaged.
"Work performed and accepted under this item will
be paid for at the contract unit price each bid for
`Removing and Resetting Shrubs', which price shall be
full compensation for removing and resetting shrubs,
excavating and backfilling pits, pruning, for
furnishing all necessary material, and for all
equipment, tools, labor and incidentals necessary to
complete the work."
"Section 2 — Proposal Requirements and Conditions
"2.2. Interpretation of Approximate Estimate. The
Bidder's attention is called to the fact that the
estimate of quantities of all work to be done and
materials to be furnished under these specifications,
as shown on the proposal form, is approximate and is
given only as a basis of calculation upon which the
award of the contract is to be made. The Commission
does not assume any responsibility that the final
quantities shall remain in strict accordance with
estimated quantities, nor shall the Contractor plead
misunderstanding or deception because of such
estimate of quantities, or of the character, location
or other conditions pertaining thereto.
"2.3. Familiarity with Proposed Work. The Bidder
must examine carefully the site of the work
contemplated, the proposal, plans, specifications,
instructions to bidders, special provisions, and
contract form before submitting his proposal, and
otherwise familiarize himself with the character and
extent of the proposed construction. Submission of a
proposal shall be considered prima facie evidence
that the Bidder has made such examination."
"Section 4 — Scope of the Work
"4.3. Alterations of Plans or Character of Work.
The Commission shall have the right to increase or
decrease the extent of the work, to change the
location or gradient or the dimensions of any part of
the work, provided that the length of the improvement
is not increased or decreased in excess of 25 per
cent of the length as determined by the Contract
award, or that the quantities of work to be done or
the materials to be furnished are not increased or
decreased in money value in excess of 25 per cent of
the total as determined by the Contract award. Such
changes shall not be considered as a waiver of any
conditions of the Contract nor invalidate any of the
provisions thereof. The Contractor shall perform the
work as increased or decreased within the qualifying
limits named and no allowance will be made for
anticipated profits on increases or decreases so
"4.4. Extra Work. The Contractor, if required by
the Engineer, shall perform unforeseen work, for
which there is no quantity and price included in the
Contract, or where increases or decreases in
quantities are made in excess of the amounts set out
in Paragraph 4.3, or whenever it is deemed necessary
or desirable to further complete the work as
contemplated. Such extra work shall be performed in
accordance with the specifications and as directed;
provided, however, that before any extra work is
started a supplemental agreement shall be signed by
both contracting parties, or a written order from the
Engineer to do the work on a Force Account basis
given the Contractor."
"Section 5 — Control of the Work
"5.1. Authority of Engineer. The work shall be done
under the direct supervision of the Engineer who is
placed in charge of the work by the Chief Engineer,
and to his satisfaction. The Engineer shall decide
any and all questions which may arise as to the
acceptability of materials furnished and work
performed, and as to the manner of performance and
rate of progress of the work, and shall decide all
questions which may arise as to the interpretation of
the plans and specifications, and all questions
as to the acceptable fulfillment of the Contract on
the part of the Contractor, and as to disputes and
mutual rights between the Contractor, and
Subcontractors under these specifications, affecting
the integrity of the work, and as to compensation.
The Engineer shall determine the amount and quantity
of the several kinds of work performed and materials
furnished which are to be paid for under the
Contract, and such decisions and estimate shall be
final and conclusive, and such estimate, in case any
question arises, shall be a condition precedent to
the right of the Contractor to receive any money due
him under the Contract. He shall have executive
authority to enforce and make effective such
decisions and orders as the Contractor fails promptly
to carry out.
"5.2. Chief Engineer to be Referee. In order to
prevent misunderstanding and litigation, it is
mutually agreed by both parties to this Contract that
the Chief Engineer shall act as referee in all
questions arising under the terms of the contract
between the parties hereto, and that the decision of
the Chief Engineer, in such cases, shall be final and
binding upon both parties alike."
"VII. Subletting or Assigning the Contract
"The contractor shall perform with his own
organization work amounting to not less than 50
percent of the remainder obtained by subtracting from
the total original contract value the sum of any
items designated in the contract as `Specialty
"Any items that have been selected as `Specialty
Items' for the contract are listed as such in the
Special Provisions found elsewhere in the contract.
"No portion of the contract shall be sublet,
assigned or otherwise disposed of except with the
written consent of the contracting officer or his
authorized representative. Requests for permission to
sublet, assign or otherwise dispose of any portion of
the contract shall be in writing and accompanied by a
showing that the organization which will perform the
work is particularly experienced and equipped for
such work. The contractor shall give assurance that
the minimum wage for labor as stated in his proposal
shall apply to labor performed on all work sublet,
assigned or otherwise disposed of in any way. Consent
to sublet, assign or otherwise dispose of any portion
of the contract shall not be construed to relieve the
contractor of any responsibility for the fulfillment
of the contract."
Thereafter, on September 16, 1950, defendant entered into the
following subcontract with plaintiffs:
"This contract agreement entered into on this the
16th of Sept. 1950 by and between M.E. Gillioz an
individual of Monett, Missouri, party of the first
part, and Forsgren Brothers, a partnership of Ft.
Smith, Arkansas, party of the second part.
"Witnesseth, the parties above mentioned have on
this date entered into an agreement whereby the party
of the second part agrees to perform in their
entireity (entirety) certain items of work covered by
the party of the first part's general contract with
the Arkansas State Highway Department, on Job No.
4333, Crawford County, Arkansas.
"The party of the second part agrees to do in their
entireity (entirety) certain items of work, covered
by the party of the first part's general contract
with the Arkansas State Highway Department on Job No.
4333, Crawford ...