*SECTION VII.

Construction of Charter in regard to Nature of Works, and Mode of Construction.

§ 111. There are some cases in regard to the construction of railway works, and their requisite dimensions, which have come under the consideration of the courts, and where the decisions are of little precedent, for other cases, not altogether analogous, and on that account scarcely deserving an extended analysis, but which nevertheless we scarcely feel justified in wholly omitting here.1

1

Attorney-General v. London & Southampton Railw., 1 Railw. C. 302. This case is in regard to the width of a road under a railway bridge. Manchester & Leeds Railw. v. Reg. (in error), 3 Railw. C. 633. The footpaths are not to be regarded as any part of the requisite width of the bridge. Reg. v. Rigby, 6 Railw. C. 479; Reg. v. London & Birmingham Railw., 1 Railw. C. 317. This is a case in regard to the width of a bridge over a highway. Reg. v. Birmingham & Gloucester Railw., 2 Railw. C. 694, which is a case in regard to the width of the approaches to a bridge across a railway. Reg. v. Eastern Counties Railw., 3 Railw. C. 22, as to the right to lower a street, in order to obtain the requisite height under a bridge, notwithstanding the provisions of the local paving act. Reg. v. Sharpe, 3 Railw. C. 33, as to the right to erect a bridge at a different angle from the former road. Where a special act required a company to strengthen a bridge described in the act, held that they might, nevertheless, pull down the old bridge and build a new one. Wood v. North Staffordshire Railw., 1 McNagh. & G. 278; Rex v. Morris, 1 B. & Ad. 441, as to making a railway on a turnpike road. A turnpike road, having power to take tolls upon any way leading out of their road, may demand tolls of passengers crossing their road upon a railway granted subsequently. Rowe v. Shilson, 4 B. & Ad.

726.

Where a railway company, in the course of construction, turned a stream of water, which by their charter they might do, restoring it to its former state, as near as practicable, and the new channel was properly guarded, as far as could be perceived, at the time of turning it, it was held, that the company were not obliged thereafter to watch the operation of the water and take precautions to prevent its encroaching upon the adjoining lands. Norris v. Vt. C. Railw., 28 Vt. R. 99. See also Fitchburg Railw. v. Grand Junction Railw. & Depot Co., 4 Allen, 198, where a question in regard to apportioning the expense of a work done by the plaintiff, for the mutual benefit of the parties, in conformity with statutory provisions, is considered, and numerous exceptions on the part of the

SECTION VIII.

Terms of Contract. Money Penalties. Excuse for NonPerformance.

1. Contracts for construction assume unusual | 6, 7. Contractor not entitled to anything for

§ 112. 1. As the time within which such works are to be accomplished is often limited in the act, and as the manner in which the * work is done, is of the greatest possible importance to the public safety, the law sanctions contracts for such undertakings, in forms not only unusual, but which might not be strictly binding perhaps in the case of ordinary contracts. For instance, it is not uncommon for the contract to impose penalties upon the contractor for slight deviations from the terms of agreement, and to secure to the company the absolute right to put an end to the contract, whenever they or their engineer are dissatisfied with the mode in which the work is done, or the progress made in it.

2. And it is almost universal, in these contracts in this country, to refer the quality and quantity of the work done, and the consequent amount of payments, to be made from time to time, to the absolute determination of an engineer employed by the company.1

3. The penalties which these contracts provide, either absolutely, or in the discretion of the company's engineer, for delay defendant are overruled by the court. The most important of these exceptions, and which the court regarded as no sufficient ground of defence, are: that the commissioner appointed under the statute, in supervising the work and apportioning the cost, conducted with partiality towards the plaintiff, and under their undue influence; and that the value of the defendant's property and franchise was diminished by the work, and those of the plaintiff increased thereby.

1

1 Ranger v. Great Western Railw., 1 Railw. C. 1; s. c. 3 Id. 298; ante, § 105.

in the work, are to be regarded, commonly, in the nature of liquidated damages. To entitle the party to recover for work

2

2

Ranger v. Great Western Railw., 27 Eng. L. & Eq. 61. In regard to the penalties given by the contract, it is said here by the Lord Chancellor: “All the circumstances which have been relied on in the different reported cases, as distinguishing liquidated damages from penalty, are to be found here. The injury to be guarded against was one incapable of exact calculation. The sum to be paid is not the same for every default, for that which should occasion small as for that which should cause great inconvenience, but one increasing as the inconvenience would become more and more pressing; and, finally, the payments are themselves secured by the penalty of a bond; and this is hardly consistent with the notion that the payments secured were themselves only penal sums to secure something else. For these reasons, I think it clear that these payments, though called penalties, are in truth liquidated damages, agreed on by the parties, and which the company might set off against the demand of the appellant upon them under the contract. But then the appellant contends that the company never had a title to recover these penalties, because the delays in respect of which they claimed were produced by the harassing and vexatious conduct of the respondents themselves, or their agents. It is sufficient on this head to say, that the appellant, in my judgment, wholly fails to make out, in point of fact, the proposition for which he contends. The only penalties actually deducted are 2001. for five weeks' delay in completing the headings of tunnels 1 and 3 in contract 1 B, and 207. for delay in the works of the Avon bridge. There is no doubt but that these sums were due, unless the appellant could relieve himself by showing that the delay had been forced on him by the company itself. The evidence altogether fails to satisfy me of this."

Where, in a contract between the original contractors for building a railway and the sub-contractors, it was provided, that the work should be subject to the supervision and control of the engineer of the company, and that he should make monthly estimates, four fifths of which “value” should be paid to the subcontractors; and when the work was completed, a final estimate; the monthly and final estimates as to the quantity, character, and value of the work done, should be conclusive between the parties; and that if the contractor should not truly comply with his part of the agreement, or in case it should appear to the engineer that the work did not progress with sufficient speed, the other party was to have power to annul the contract; and the unpaid portion of the road was to be forfeited by the sub-contractor and become the property of the other party;

Held, that the award of the engineer declaring the work forfeited, was conclusive, and binding on the sub-contractor; that the action of the sub-contractor upon the contract was in affirmance of the contract, and that he could not therefore impeach its stipulations.

That the term "value," as used in the contract, was to be distinguished from the term "price,” fixed for the different classes of work, and that the engineer, in making monthly estimates, had a right to deduct from the amount of work

done upon *construction contracts, he must show, either that he has performed the labor according to the contract, or that the other party has waived strict performance, or hindered it.3

4. But the party may excuse full performance by showing that he was prevented by an injunction out of Chancery at the suit of a third party. Or, that the parties had entered into a new contract for the same work, upon different terms.5

5. Where the work was suspended at the request of the company, with the view to a new location, the company agreeing to pay the plaintiff $750 by way of damages, if the work should not be resumed within two years, and, if it was, the plaintiff to proceed with the work at the prices stipulated, upon those sections not altered; the route being altered as to some of the sections, upon which the defendants resumed within the two years, employing others to do the work, without giving notice to plaintiff; held, that the plaintiff could not recover the damages agreed, as the work was resumed within the two years, but that the plaintiff was entitled to damages for not being employed to do the work.6

*

6. Where, by the terms of the contract, a proportion of the sum earned is to be paid monthly, and the remainder reserved,

done sufficient to bring it to the average of all the work to be done, and is not bound to allow the sub-contractor the price stipulated in the contract, for work of this description.

If the company withheld unjustly funds due the sub-contractor, they could not fairly take advantage of the forfeiture declared for want of prosecution of the work. But the retention of the 20 per cent. in case of forfeiture, is intended as the measure of reparation for the failure to perform the work according to the contract, and not as a mere penalty.

The payment after the forfeiture, by one of the original contractors, of the hands who had been employed on the works by the sub-contractor, and furnishing money to carry on the work, is not a waiver of the forfeiture, especially if he was then ignorant that the work had been forfeited. Faunce v. Burke, 16 Penn. St. 469.

3 Andrews v. The City of Portland, 35 Me. R. 475. And it was held here, that part payment, under the contract, after the contractor had failed in strict performance, was no waiver, unless the failure was known to the employer at the time of payment.

4 Whitfield v. Zellnor, 24 Miss. R. 663.

5 Howard v. The Wilmington & Susquehannah Railw., 1 Gill, 311.

• Fowler v. Kennebec & Portland Railw., 31 Me. R. 197.

* 201, 202

as security for the fulfilment of the contract, it was held, that nothing was due till the day of payment, which could be attached by trustee process.7

7. And where, in such case, the company have the power to determine the contract, and the reserved fund is thereby to be forfeited, and the company do so, after the contractor has worked one month and part of another, and has received the proportion of payment for the first month, it was held nothing was due to the contractor.8

8. Where a railway company, after making a contract for the construction of its road, became embarrassed and was unable to make payments to the contractor, and the president, who was a stockholder, and extensively interested in the success of the enterprise, made an additional agreement with the contractor that he would give him his notes to the amount of $10,000, if the work were completed by a day named, it was held, that he was not liable upon the agreement unless the contractor performed his part of the agreement by the day named. The notes were, by the terms of the agreement, to go in part payment of what was due from the company, and the new agreement was not to affect the subsisting contract with the company.9

2. But the express requirements of the charter 4. If the company have the benefit of work

must be complied with.

3. Extra work cannot be recovered of the com

are liable.

§ 113. 1. No particular form of contract is requisite to bind the company, unless where the charter expressly requires it.1

› Williams v. Androscoggin & Kennebec Railw., 36 Me. R. 201.

› Hennessey v. Farrell, 4 Cush. 267.

• Slater v. Emerson, 19 How. (U. S.) 224.

1 Post, §§ 164, 130, 143. Corporations cannot enter into partnerships, but two or more corporations may become jointly bound by the same contract. Marine Bank of Chicago v. Ogden, 29 Ill. R. 248.