Opinion
07-09-1913
BARLOW v. JONES et al.
E. R. Walker and F. S. Katzenbach, both of Trenton, for complainant. Charles E. Bird, of Trenton, for defendants.
Bill by John Barlow against Josiah Jones and others. Decree for complainant.
E. R. Walker and F. S. Katzenbach, both of Trenton, for complainant.
Charles E. Bird, of Trenton, for defendants.
REED, V. C. This bill is filed to enjoin the collection of a check deposited with a building commission appointed to erect a courthouse in Mercer county. The check accompanied a proposal by the complainant to build a courthouse. Both were delivered in conformity with the terms of an advertisement for proposals, which required that each bidder must present with his proposal a certified check payable to the Commissioners for $10,000, which check should be held by the commission as security that such bidder, in case the contract shall be awarded to him, will forthwith enter into such contract in writing and give the bond required by the specifications; and on failure to do so the amount of said check shall be forfeited as fixed and liquidated damages for the failure of such bidder to enter into such contract and give bond.
The complainant's bid was accepted; but he, upon discovering that his proposal was $28,769 less than he intended it should be, declined to execute the contract and give the bond and notified the commission of his mistake and asked that he be permitted to correct his bid, which the commission declined to do, and awarded the contract to the next lowest bidder and declared that complainant's check for $10,000 was forfeited. The real ground for equitable relief must be found in the theory that the contract which arose from acceptance of complainant's bid should be canceled upon the ground that it was a product of a relievable mistake.
The complainant is a contracting mason. In accordance with the specifications, he submitted proposals for the erection of the new courthouse in five different shapes, varying in accordance with the materials to be used in each of the five proposed methods of construction. Mr. Barlow proposed to do that part of the work falling within his trade as mason. To enable him to bid for the entire work, he solicited bids from subcontractors for the other portions of the work. His bids were to be in by 10 o'clock in the forenoon of August 14, 1901. On the morning of August 14th Mr. Barlow and his bookkeeper, Mr. Van Syckel, waited until the arrival of the morning mail to get the latest bid of any subcontractor who had not yet submitted his bid. Upon the arrival of this mail, they proceeded to add to the amount which Mr. Barlow had fixed for his own work the amounts bid by each lowest responsible subcontractor for his portion of the work. There seems to have been seven different parts of the work to be done by subcontract in each one of the five different plans upon which bids had been invited. One of the subcontractors was J. W. Lanning, whose bid was $28,769. The items to make up the amount of the complainant's bid, as they were written by Mr. Van Syckel, the bookkeeper of the complainant, on that morning, are in evidence. The items from which the amount of bid No. 1 was computed, as wellas bid No. 2, appear on schedule one. The items from which the three other bids were made appear on schedules 2, 3, and 4, respectively. The bid of Mr. Lanning should have appeared as an item in each one of these five calculations. It appears only in the first two. It does not appear among the items which were the basis of the computation from which the accepted bid was made. This item of over $28,000 was overlooked. The amount for which Mr. Barlow proposed to build the courthouse was consequently $28,769 less than it would have been had this error not occurred. The amount named in his bid was a manifest mistake.
The question supervenes: Is it such a mistake as entitles the complainant to relief in the court of equity? A court of equity does not grant relief merely because a party has mistakenly entered into a contract. Whether equity will relieve in any particular case must be determined by the importance of the mistake—whether it can be rectified without injurious results to the other party who may have assumed obligations or changed his posture upon the supposition that the contract was a valid and enforceable one, and whether the mistake was or was not the product of gross negligence on the part of the party asking for relief.
That the mistake was a very serious one to the complainant is apparent from the testimony. The complainant would never have dreamed of entering into a contract to do the work for the price named but for this error. It is clear that the contract could not be executed for the price named without serious and perhaps ruinous loss to the complainant Secondly, it is apparent that the rectification of the mistake will entail no injury on the defendants by reason of anything that they have done in reliance upon a belief that a contract existed between them and the complainant, springing out of their acceptance of his proposal. Notice was promptly given to the commission of the existence of the mistake and of Mr. Barlow's inability to execute the contract. The commission then accepted the bid of the next highest bidder just as it would have done had Mr. Barlow never bid. There has been no change in the status of the parties induced by the belief that Barlow would execute his contract or by any negligence in promptly reporting the mistake. Thirdly, is the complainant barred from relief on the ground of gross negligence? It appears that, at the time these proposals were prepared, Mr. Barlow was a sick man. His vitality had been sapped, his nervous system shattered by a diabetic disorder, which later led to partial paralysis. Understanding his physical condition, the account given by Mr. Van Syckel of what occurred on the morning of August 14th becomes intelligible. Mr. Van Syckel says that on this morning the items making up Mr. Barlow's own work had been prepared, and they were waiting for the arrival of additional bids from subcontractors. Upon receiving them, they proceeded to prepare their bids. Mr. Barlow called off the subcontractor's bids and their amounts, and Mr. Van Syckel wrote them. After the items constituting the first two bids had been written, they were interrupted by a gentlemen representing a bidder, who prolonged his conversation until Mr. Van Syckel warned Mr. Barlow of the flight of time, when Mr. Barlow, dismissing the visitor, tried to resume his dictation of items for the remaining bids. At this point Mr. Van Syckel says Mr. Barlow broke down and exclaimed, "I am so nervous I cannot do anything, and the time is getting short" Mr. Van Syckel says, "I took pity on him and grabbed up the papers and went over the sub-bids and entered them down; and by some hook or crook I omitted to enter the carpenter's bill."
It seems almost certain that but for the collapse of Mr. Barlow at this point of the transaction the last three bids, including the one accepted, would have contained the carpenter's bill. By reason of the collapse, Mr. Van Syckel, who had only been registering what Mr. Barlow had been dictating, was compelled to examine the papers himself and, being pressed for time, inadvertently overlooked the carpenter's bill. The mistake was one which, in my judgment, might occur to a careful man and was certainly one which cannot be characterized as grossly negligent. The mistake was exactly like that in Webster v. Cecil, 30 Beav. page 62. A man wrote that he would sell 21 acres of land for £1,100. His correspondent at once accepted in writing. The first party previously to writing his offer made a calculation of the value of each parcel which made up the 21 acres and in adding the parcels made a mistake of £1,000. On a bill for specific performance of this contract, the mistake was set up as a defense, and specific performance was refused. While the contract was not canceled, the only ground for refusal of specific performance was that by reason of the mistake it was inequitable to enforce the contract, which logically means that it would be equitable to cancel it. The citation of other cases would be of little use, as each case must stand upon its own footing.
I will advise a decree annulling the contract arising from the bid and the acceptance thereof and directing a delivery of the complainant's check to him.