Opinion
Rehearing Denied April 19, 1966.
For Opinion on Hearing, see 56 Cal.Rptr. 473, 423 P.2d 545. Thomas C. Lynch and Stanley Mosk, Attys. Gen., Walter S. Rountree, Asst. Atty. Monteleone & McCrory and David P. Yaffe, Los Angeles, for plaintiffs and respondents.
FORD, Justice.
This is an appeal by the defendant State of California from a judgment against it in the amount of $621,779.16. The primary question to be resolved is whether the trial court correctly determined that there was a breach of warranty on the part of the State with respect to a source of materials designated for use in the performance of a highway construction contract. In entering into the contract the plaintiffs acted together pursuant to a joint venture agreement.
The findings of fact of the trial court were in part as follows: 1. On or about April 23, 1954, the State advertised for bids for the construction of certain highway improvements in Riverside County. 2. The plaintiffs, as one of the prospective bidders on the project, were furnished by the State with a copy of the special provisions relating to the project, wherein it was represented that the material on the hillside left of Station 615 was of satisfactory quality for the production of gravel blanket, imported base material, mineral aggregate for cement treated base, and mineral aggregate for plant-mixed surfacing. 3. The plaintiffs and other prospective bidders attended a pre-bid showing of the job conducted by the State at the job site on May 7, 1954. 4. At that showing the State exhibited to the plaintiffs a report on local material sources prepared by the State. That report, interpreted according to the custom and practice prevailing in the construction industry at the time of and in the area of the project, represented that the State had tested that particular source designated in the special provisions [the Wilder pit] and that the tests on the samples indicated a high of 55% sand and 45% rock and a low of 88% sand and 12% rock and that the average between the high and low tests was 71.5% sand and 28.5% rock. 5. That report on local material
That particular designated source was known as the Wilder pit.
The special provisions were in part as follows: 'CHAPTER II. SPECIAL REQUIREMENTS * * * (c) Local Materials.--Attention is directed to Section 6, articles (b) and (f), of the Standard Specifications. Samples indicate that material of satisfactory quality for the production of imported base material, gravel blanket material, and mineral aggregate for plant-mixed surfacing and cement treated base, may be obtained left of approximate Station 615. Arrangements have been made for the Contractor to obtain material at the above location at a price not to exceed 3/4 cent per ton for material removed from the site and used on the work.'
The document was dated April 28, 1954, and was a 'Memo.' addressed to Mr. Dekema by Mr. Hutchinson, Mr. Dekema being the assistant district engineer and Mr. Hutchinson being the acting materials engineer for District VIII of the Division of Highways of the Department of Public Works of the State of California. Portions thereof were as follows: 'Submitted herewith is information concerning possible local material sources for the project VIII-Riv-26-D, E from 2.3 miles west of Garnet to Edom. This information has been developed during the investigation for borrow sites and possibly would be of value to the prospective bidders for this project. * * * This hillside [described as 'Hillside Left of Station 600 D to 625 D'] is composed of rather loosely compacted sand and gravel ranging from 4 inches to dust. A layer of blow sand covers the base of the hill and apparently exists in spots on the slope as some test holes encountered considerable coarse material while others were practically all sand.
The primary question to be resolved is whether the record sustains the determination of the trial court that there was a warranty on the part of the State which was breached.
In Souza & McCue Constr. Co. v. Superior Court, 57 Cal.2d 508, at pages 510-511, 20 Cal.Rptr. 634, at page 635, 370 P.2d 338, at page 339, the Supreme Court stated: 'A Contractor of public works who, acting reasonably, is misled by incorrect plans and specifications issued by the public authorities as the basis for bids and who, as a result, submits a bid which is lower than he would have otherwise made may recover in a contract action for extra work or expenses necessitated by the conditions being other than as represented. (E. g., United States v. Spearin, 248 U.S. 132, 136-137, 39 S.Ct. 59, 63 L.Ed. 166; Christie v. United States 237 U.S. 234, 239-242, 35 S.Ct. 565, 59 L.Ed. 933; McCree & Company v. State, 253 Minn. 295, 91 N.W.2d 713, 721-722; see Gogo v. Los Angeles etc. Flood Control Dist., 45 Cal.App.2d 334, 341, 114 P.2d 65; 43 Am.Jur. 852; Annotation 76 A.L.R. 268.) This rule is mainly based on the theory that the furnishing of misleading plans and specifications by the public body constitutes a breach of an implied warranty of their correctness.' In MacIsaac & Menke Co. v. Cardox Corp., 193 Cal.App.2d 661, at page 669, 14 Cal.Rptr. 523, at page 528, this court stated: 'As a general proposition, it is well recognized that where plans and specifications induce a contractor to reasonably believe that certain indicated conditions actually exist and may be relied upon in submitting a bid, the contractor is entitled to recover the value of such extra work made necessary by the existence of different conditions. Gogo v. Los Angeles County Flood Control Dist., 45 Cal.App.2d 334, 341, 114 P.2d 65.'
In the case of United States v. Johnson (9 Cir.1946) 153 F.2d 846, the specifications with respect to the construction of a highway contained the following paragraph: 'Sources of Supply. Gravel for crushing is available approximately 0.5 mile right of Station 870 and rock for crushing is available approximately 0.3 mile right of station 1239. Unless otherwise specifically approved in writing by the engineer only materials from the above sources shall be used for crushing. Additional filler that may be necessary to meet the required grading shall be obtained rom sources approved in writing by the engineer.' In undertaking the performance of the work under the contract the contractor discovered that there was soft rock beneath the surface of the quarry.
In the Johnson case, the contractor sought to recover damages on the theory that the quoted paragraph constituted a representation or warranty that satisfactory materials could be produced from the designated quarry for all the work required under the contract, and that the shortcomings of the quarry both with respect to quality and quantity of materials amounted to a breach of the warranty. The damages sought were for the increased costs growing out of the claimed breach, the added costs being in part for the change in location, for the opening of a new quarry, for longer hauls, and for expenses arising from shutdowns and delays and from repairs to machinery. In addition, recovery was sought as to the amount of the liquidated damages assessed by the government.
In affirming a judgment in favor of the contractor the court said in part (153 F.2d, at page 849): 'Here there was a deceptive representation that rock suitable for crushing was 'available' at a given point, and the contractor was in so many words notified to look there for his source of supply. The inescapable assumption was that the material was adequate as well as suitable. The contractor, in estimating costs, was entitled to figure his bid on that assumption. The phrase 'unless otherwise specifically approved in writing by the engineer, only material from the above source shall be used for crushing' warned the bidder that he was not to look elsewhere in figuring costs of materials; and that if he did so he ran the risk of having such materials disapproved by the engineer. We do not believe that the final sentence of the specification put a different face on the matter. Requirements of fair dealing underlie government as well as private contracts.'
In the present case the portion of the special provisions upon which the plaintiffs place primary reliance was the statement that 'Samples indicate that material of satisfactory quality for the production of imported base material, gravel blanket material, and mineral aggregate for plant-mixed surfacing and cement treated base, may be obtained left of approximate Station 615.' Further reliance is placed upon the memorandum (designated in the findings of fact as the report on local material sources) which was made available to the prospective bidders at the showing on May 7, 1954 (see footnote 3, supra), a portion of which, relating to the Wilder pit, was as follows: 'Tests indicate that after processing, to meet the grading requirements, the material is suitable for imported base material, cement-treated base aggregate, gravel blanket, and plant-mixed surfacing aggregate. Some selection may be necessary to insure that the material used for PMS aggregate is sufficiently hard to pass the LART test.' It was also stated in that memorandum: The position of the plaintiffs is that the information given to prospective bidders in the quoted portions of the special provisions and the memorandum was not accurate because the material in the Wilder pit was not of satisfactory quality for the production of the mineral aggregate products in that the gradation of the material to be found in the pit was substantially finer in nature than was represented. It is asserted that the memorandum contained the representation that the pit had an average gradation of 71 1/2% sand (passing the No. 4 sieve), whereas the pit actually averaged approximately 90% sand. It is further stated in part that such discrepancy was due to the fact that the State limited its sampling to the top ten feet of the pit and failed to disclose that fact in either the special provisions or in the memorandum, and to the fact that 'the State made unwarranted assumptions from the samples which it took and presented those assumptions to prospective bidders as statements of fact.'
With respect to the meaning of the particular language used in the special provisions, the State introduced the following testimony of its witness, Mr. Matich, one of the unsuccessful bidders: 'Q. Mr. Matich, have the words 'samples indicate that materials of satisfactory quality for the production of' and so forth come to have a generally accepted meaning in the construction industry? A. Yes, sir. Q. And What do they mean? A. That materials at these locations may be produced. Q. And will meet what? A. Will meet the quality requirements of the specifications.' Mr. Matich further testified: 'Q. BY MR. HOEGSTEDT [attorney for the State]: Well, Mr. Matich, as that clause is understood in the construction industry, does that mean that sufficient quantity of material can be obtained at the designated source? A. No, sir.' Another of the State's witnesses, Mr. Fuller, testified upon the same subject: 'Q. Now, have the words 'samples indicate that materials of satisfactory quality' come to have a meaning generally recognized in the construction industry, Mr. Fuller? A. Yes. Q. And what meaning have they come to have? A. That would indicate that with processing to meet the gradation requirements, that the materials in the site met the quality--already met the quality requirements and could be produced to meet the specific requirements of the particular item in the specifications. Q. And when you say the specific requirements, you mean the specific quality requirements? A. Yes, sir.'
Thereafter the plaintiffs offered evidence with respect to the meaning of the particular words of the special provisions in the construction industry. Mr. Atkinson testified as follows: 'Q. And at that time in May of 1954, what was the customary meaning in the construction industry of the words 'samples indicate that material of satisfactory quality for the production of certain items may be obtained left of approximate Station 615'? A. Well, it was simply the indication that the pit would be a satisfactory source for the material. Q. What was the customary meaning in the industry at that time as to the expression 'Material of satisfactory quality'? A. Well, that it would pass all of the various tests for hardness and so forth. I think that's the first thing it would mean. Q. And did the expression at that time have any significance regarding the gradation of the material in the source? A. Well, quality, you've got to define that pretty carefully. Perhaps I can help if I Just say that this paragraph indicated to us that it would be a satisfactory source and that the site would not be mentioned unless the material were there. Now, whether the word quality means that the material is there is something for Webster but when ever we saw this paragraph or a paragraph comparable to it, we thought that the State Another witness for the plaintiffs, Mr. Westbrook, stated that in 1954 the particular language 'would mean that the material was available there and it was satisfactory for the use that it says.' Mr. Westbrook further testified in part as follows: 'Q. In particular then the words 'may be obtained left of approximate Station 615,' what meaning would those words have in the construction industry in 1954? A. Well, it would mean that you could obtain and manufacture the materials that were required for the job. Q. Would it mean that the materials could be manufactured from that source without importing material from another source? A. It would. * * * Q. * * * The question is, do you know what the meaning would be in the construction industry at that time? A. That it would mean that the material was there and that you could produce it from the source. Q. Without excessive waste? A. Without excessive waste.'
On behalf of the plaintiffs, Mr. Bailey, a contractor, testified that the statement in the special provisions had the meaning in the construction industry 'that the material was there' and that the material could be produced from that source. He further testified in part as follows: 'Well, Exhibit No. 1 [the special provisions] says the material is there and Exhibit No. 2 [the memorandum as to sources of material] shows the gradations in the various pits and from that I would or you would say that it had considerable material and it can be processed make the products required by the specifications. * * * In No. 1 the industry is informed the material is there. In No. 2 the industry is informed of the grading characteristics of the material and from that information you develop your method of processing.' 4
It is clear from the record that it was important that the bidders be informed of Mr. Babcock, who was assigned to work in the materials laboratory of the Division of Highways at the time he prepared the memorandum, testified that the samples used were limited to the top ten feet. He further stated that the gradation of the material in the pit was a factor to be used in determining the quantity of material available. The samples taken were sufficient for the State's purpose, which was to determine areas that were potential sources of material. In response to an inquiry as to whether, in his opinion, the samples were sufficiently representative for use by bidders, Mr. Babcock said: 'I would not have bid with them if I were a bidder and it was my particular job to bid that project.'
In determining that there was a warranty as to the nature of the Wilder pit as a source of materials, the trial court considered both the language of the special provisions and the contents of the memorandum with respect to the Wilder pit. The State contends that such use of the memorandum constituted a violation of the parol evidence rule. That contention is untenable. It is a reasonable inference that the State offered that memorandum to the prospective bidders for the purpose, which was apparent to such bidders, of making more certain the general statement of the special provisions that 'Samples indicate that material of satisfactory quality for the production of imported base material, gravel blanket material, and mineral aggregate for plant-mixed surfacing and cement treated base, may be obtained left of approximate Station 615.' Such extrinsic evidence was admissible for the purpose of determining what the parties meant by the quoted language of the special provisions. (See Coughlin v. Blair, 41 Cal.2d 587, 605, 262 P.2d 305; Schmidt v. Macco Construction Co., 119 Cal.App.2d 717, 730, 260 P.2d 230; see Jones v. Holland Furnace Co., 188 Wis. 394, 206 N.W. 57, 58-59.)
The record affords substantial support for the finding of fact of the trial court that it was the intention of the parties that the representations made by the State in the special provisions and in the memorandum relating to local material sources would, upon the awarding of the contract, constitute a warranty as to the quality of the material available and the quantity of material that would have to be processed in the wilder pit. As has been noted, it was of substantial importance to the contractor to have information as to the relative amounts of sand and rock available in the Wilder pit. Too much sand would result in excessive waste and too little rock would affect the ability of the contractor to make part of the necessary products by use of that source.
Apropos is the reasoning of the court in Sartoris v. Utah Const. Co. (9 Cir.1927) 21 F.2d 1, a case in which it was stated in the specifications that part of a tunnel excavation at each end was 'expected to be in earth formation, and the remainder in solid rock, with possibly a short distance in loose rock, or a combination of all three.' In the very early progress of the work, however, the plaintiff encountered a formation of unusually fine, loose sand, which caused an increase in the expense of performing In the Sartoris case, the court further stated (21 F.2d, at pages 2-3): 'As we read the language, it was equivalent to saying to prospective bidders or contractors, 'You may bid in the expectation,' or, 'In submitting your bids and in contracting, you may assume, that part of the tunnel excavation will be in earth formation and the remainder will be in solid rock, with possibly a short distance in loose rock, or a combination of all three; and by referring to the accompanying drawings you will see that the design is suited to such, and only such, a formation.' So read, it constituted a warranty.'
The conclusion that there was a warranty as found by the trial court is not altered by reason of provisions in the standard specifications upon which the State places reliance. Aside from the question Hollerbach v. United States,
Article (c) of section 2 of the standard specifications of January, 1949, which were a part of the contract, contained the following provisions:
In the present case it would not be reasonable to hold that the State, by resorting to provisions of an exculpatory nature in the standard specifications, could escape responsibility for the accuracy of information upon which it expected bidders to place reliance in formulating their bids. In such circumstances the State is not relieved from liability by general contractual provisions requiring the bidder to investigate a source of materials which is designated by the State as being satisfactory in nature.
Before turning to the question of whether the evidence was sufficient to show a breach of the warranty, it is necessary to consider the matter of the plaintiffs' reliance on the warranty inasmuch as the State contends that the evidence was insufficient to sustain a finding of such reliance. James F. Seger, an employee of the plaintiffs at the time of the showing on May 7, 1954, and during the period of time in which the plaintiffs' bid was being prepared, testified that at that showing he copied information contained in the memorandum as to the Wilder pit. He further testified as to his use of that information in preparing the bid: 'For the various items of imported base, cement treated base and plant-mixed surfacing I made an analysis from these, breaking it down finer actually into intermediate size screens, and in doing this prepared a visual colored chart to show the highs and lows of the various screen sizes so I would have a better picture of the pit Charles E. McCammon, one of the plaintiffs, testified that he attended the prebid showing which was held in the area of the project on May 11, 1954. He saw the memorandum as to local material sources. He observed the Wilder pit. Part of Mr. McCammon's testimony was: 'Q. Then was this job bid by the McCammon-Wunderlich Company on the basis of the plant being located at the Wilder pit for producing all four of the mineral aggregate products? A. It was. Q. And was that decision based upon the information that you had received from the State in plaintiffs' Exhibit 2 [the memorandum] and in the special provisions, plaintiffs' Exhibit 1? A. Yes.' He further testified that prior to the submission of the bid he did not cause any tests to be made on the Wilder pit because 'we thought that we could rely on the State Tests.' He assumed that the gradation of the pit was accurately set forth in the memorandum.
This court is not free to reject testimony that has been believed by the trier of fact unless there exists either a physical impossibility that it is true or its falsity is apparent without resorting to inferences or deductions. Even testimony which is subject to justifiable suspicion does not warrant the reversal of a judgment. The trial court believed the evidence introduced by the plaintiffs upon the issue of reliance and that evidence was sufficient to sustain the finding of fact in their favor with respect to that issue. (See Maurice L. Bein, Inc. v. Housing Authority, 157 Cal.App.2d 670, 681, 321 P.2d 753.)
The record sustains the finding of the trial court that the gradation of the material in the Wilder pit was substantially finer than was represented by the State in the memorandum relating to local material sources in that it was, on the average, approximately 10% rock and 90% sand. Raymond G. Osborne, the president of a concern engaged primarily in the testing and inspection of construction materials, testified as to gradation analyses of mineral aggregates from the Wilder pit made for the plaintiffs by his laboratory in January and February of 1956. He stated that Exhibit 48 was an accurate summary of the gradations as shown in the test reports of his laboratory (Exhibit 41) and that that exhibit contained an accurate reproduction of the gradations as shown on the memorandum relating to local material sources (Exhibit 2) with respect to the Wilder pit. The comparison so made is set forth in the footnote (the no. 4 sieve
Turning to the matter of damages caused by the breach of warranty, as has been noted the trial court found as follows: 'In order to produce the gravel blanket, imported base material, mineral aggregate for plant mixed surfacing, and mineral aggregate for cement treated base required by the contract, plaintiffs were required to and did incur costs in excess of those that would have been necessarily incurred if the material in said designated source had been as represented. Said excess costs incurred by plaintiffs were in the reasonable sum of $542,244.67, no part of which has been paid by defendant to plaintiffs.' Thus the trial court made a finding as to the difference between the actual reasonable cost of the work and what the reasonable cost would have been if the warranty had not been breached. (F. Gogo v. Los Angeles etc. Flood Control Dist., 45 Cal.App.2d 334, 339, 114 P.2d 65; United States v. Johnson, supra, 153 F.2d 846, 848.) It is thus obvious that the trial court proceeded in accordance with the theory of the measure of damages which the State concedes to be proper, although the State contends that the evidence does not support the amount of the judgment even if there is liability on the part of the State. The State argues that the damages that could properly be recovered were limited to the added costs of producing gravel blanket because, it is asserted, any misrepresentation or breach of warranty related only to the plaintiffs' ability to produce that item. That the waste factor with respect to that item was great is clear from the record. But while the evidence shows The State also argues that in any event damages must be limited to the amount of expenditures made by the plaintiffs to bring the rock content of the Wilder pit to a point commensurate with its represented condition. But the attention of this court is not called to any portion of the record that compelled the trial court to draw an inference that that point was ever reached by means of the importation of rock from the S.P. pit or that the represented condition could in fact be satisfactorily duplicated by that method. Moreover, the State's argument based on the section of the standard specifications with respect to the exhaustion of designated sources of material is not well founded inasmuch as the rights of the plaintiffs arose out of a breach of the warranty as to the nature of the Wilder pit rather than merely out of the exhaustion thereof.
In the opening brief of the State the following statement is made: 'However, it is submitted that plaintiffs are entitled to only the increased costs over and above that which they would have been had there been no breach or misrepresentation. See Gagne v. Bertram [Bertran], 43 Cal.2d 481, 490 [275 P.2d 15], and Civil Code Section 3300.'
In Appendix D to the opening brief of the State, it is said in part: 'In determining the amount of waste that will be encountered in a material site, two factors which affect waste must be considered. One is the percentage of sand present in the material source and the second is the percentage of sand which can be used in the particular products to be produced. The correct method of computing the waste may be illustrated as follows: The specifications for gravel blanket permit 25% to 35% of the finished product to be sand (-No. 4 materials). For simplicity in our illustration, we will assume Gravel Blanket to have fixed requirements of 65% rock (+No. 4 material) and 35% sand (-No. 4 material). This will place our product on the high side of the tolerances this contract permitted for Gravel Blanket (i. e., will permit the greatest use of sand in the product). Let us further assume that we have a 100 pound unit of material from a pit containing 29% rock and 71% sand. (The percentages assumed by plaintiffs in bidding this item.) In producing the Gravel Blanket product, we will have available out of the 100 pound unit only 29 pounds of rock. Of the remaining 71 pounds of sand we will be able to combine with the rock, only that quantity of sand which will give a product of 65% rock and 35% sand, which is the specification requirement for Gravel Blanket. Thus, with the 29 pounds of rock we will be able to use only 15.6 pounds of sand, or, out of the 100 pound unit, we will be able to use a total of only 44.6 pounds of material (29 pounds rock and 15.6 pounds sand). The remainder of the 100 pound unit or 55.4 pounds of material would be waste. Since we have used 100 as our unit, the percentage of waste would be 55.4%.'
Article (b) of section 6 of the standard specifications was in part as follows:
The State also attacks the determination of the trial court that the plaintiffs were entitled to recover $45,392.78 for water applied by them. The contention is that the plaintiffs failed to establish any right of action under the contract for payment of water applied to their haul roads and that no evidence of actual costs or increased costs was introduced to support the findings which allowed such amount with respect to the breach of warranty as to the Wilder pit.
Section 15 of the standard specifications provided in part as follows: 'Water * * * for laying dust caused by grading operations and traffic, shall be applied in the amounts and at the locations designated by the Engineer.' It was further provided that payment would be made 'at a unit price per thousand gallons for applying water.' Another portion of that section was: 'The price paid per thousand gallons for applying water shall include full compensation for The pertinent findings of fact of the trial court were: 1. In the performance of the contract the plaintiffs 'applied 18,157.11 M gallons of water' for which they were not paid. 2. That water was 'applied to lay dust caused by grading operations and traffic on haul roads which were constructed and maintained for the purpose of enabling plaintiffs to haul mineral aggregate materials from said additional crushing and screening plant to the roadbed and to the designated source. Said haul roads would not have been necessary if the material in said designated source had been as represented.' 3. The State's engineer did not contest the necessity of the use of such water for laying dust, but refused to approve payment for that water on the sole ground that the State was not obligated under the contract to pay for water applied to haul roads off the roadbed which application the engineer had not ordered.
It is clear from the findings of fact and conclusions of law that the plaintiffs were permitted to recover damages on the ground that there had been a breach of warranty and that the additional application of water had been rendered necessary because of that breach. Accordingly, the plaintiffs were entitled to recover the reasonable value of such application of water as one of the items of damage suffered by them. The State argues, however, that the plaintiffs offered no proof as to their costs or expenditures in applying water to the haul roads, such as 'equipment charges for water trucks and operators plus pumping or royalty costs in obtaining the water.' The State further asserts that the contract price of $2.50 per unit could not be considered as evidence of reasonable value because that contract price was not the subject of specific negotiation but was 'merely one item out of a total of 45 items unilaterally submitted by plaintiffs' and was in the nature of an 'unbalanced' bid.
In the absence of other pertinent evidence in the record as to the reasonable value of such application of water we are not constrained to hold that the trial court erred in considering the unit price as set forth in the contract as evidence of such reasonable value. The applicable reasoning is that found in Ferrier v. Commercial Steel Corp., 142 Cal.App.2d 424, at page 427, 298 P.2d 555, at page 557: 'It is well settled that the price agreed upon by the parties for work to be done may be used as a criterion in ascertaining the reasonable value of services performed. The point is illustrated by Whitty v. Fidelity & Deposit Co., 123 Cal.App. 334, 11 P.2d 84, 85. In that case plaintiffs had sued to recover 'the reasonable value of the work performed by them.' The amount which the trial court found to be the reasonable value of the work performed was the exact sum specified in the contract to be paid for it. The only point urged on appeal was that the amount of the reasonable value of the services found by the trial court was not supported by the evidence. In affirming the judgment the court pointed out, 123 Cal.App. at page 337, 11 P.2d at page 85: 'it has been repeatedly held in this state that the contract price of work to be performed furnishes some evidence of its reasonable value. In the case of Divani v. Donovan, 214 Cal. 447, 455, 6 P.2d 247, 250, it was said: 'The contention of the defendants apparently is the, in the absence of any proof other than Wilson v. Mattei,
In the State's opening brief reference is made to calculations in the plaintiffs' bid estimate (part of the plaintiffs' own records) resulting in two figures, $1.01 and $1.18 per unit of 'M gallons.' But the figures were not used by the plaintiffs in their bid and did not relate to application of water to the haul roads in question under the unanticipated circumstances arising from the breach of warranty.
It is true that in the findings of fact it was stated that the plaintiffs were entitled to be paid for the water 'at the contract price of $2.50 per M gallon[s]'. But, in the light of the record, it is not reasonable to assume that the total amount found to be due to the plaintiffs would have been different if the finding had been expressed in terms of reasonable value. Hence there has been no miscarriage of justice and there is no basis for a reversal of the judgment with respect to this item of damage. (See Vaughn v. Jonas, 31 Cal.2d 586, 601, 191 P.2d 432.)
The trial court found that the sum of $45,392.78 for the application of water became due and payable to the plaintiffs on November 6, 1956. Interest on that sum was allowed from September 18, 1959, to the date of entry of judgment. Since the plaintiffs were entitled to recover only the reasonable value of the application of water made necessary by the breach of warranty and since that amount was not certain or capable of being made certain by calculation at the time the plaintiffs' right to recover damages because of the breach of warranty accrued, the plaintiffs were not entitled to interest with respect to that item prior to judgment. (Cf. Parker v. Maier Brewing Co., 180 Cal.App.2d 630, 635, 4 Cal.Rptr. 825.
Section 3287 of the Civil Code, relating to the recovery of interest, was made applicable to the State by the amendment of 1959 which became effective on September 18, 1959. (Stats.1959, ch. 1735, p. 4186.)
One further matter of a specific nature remains for consideration. The trial court found that the plaintiffs' completion of their work under the contract was delayed for a period in excess of 172 calendar days by reason of the fact that the material in the Wilder pit was not as represented and that, accordingly, the State had no right under the contract to withhold from the plaintiffs the sum of $17,200 as liquidated damages. The State contends that the evidence supports only the conclusion that the 'overrun' of 172 calendar days in completing the project resulted from delays caused by the contractor prior to the production of any of the local materials. While the evidence may well have supported an inference in favor of the State's position, our independent examination of the record has led to the conclusion that the trial court was justified in making the findings of fact to which reference has been made.
Moreover, in any event we would be warranted in assuming that the evidence is sufficient to support the specific findings of fact of the trial court upon the issue of delay because the State has failed to show on this appeal that there was no substantial evidence to support the challenged findings. As was said in Routh v. Palm Oil Co., 160 Cal.App.2d 359, at pages In its closing brief, the State asserts that the computation of damages was made upon an improper basis and that the amount awarded was not supported by the evidence. The attack is primarily upon a statement in the plaintiffs' brief which we set forth in the footnote. Thus, it is argued that the correct amount of 'theoretical waste' was 426,000 tons which, when compared with the estimated requirement of 515,000 tons, 'gives a theoretical waste factor of approximately 45%.' It is stated that 'there was no evidence whatsoever to support the 31% waste factor.' The record discloses, however, that Marion E. Nelson, the resident engineer for the State on the project for a period of time, testified as follows as to a calculation which he had made: 'I see I have 31% average waste and that's without any contingency added. That's meeting the bare minimum on the critical sieve sizes, also neglecting the effects of crushing.' But even if it be assumed that a waste factor of 45% was the correct factor to be employed, the State has not shown that the trial court did not use a proper basis in arriving at its determination of damages in the amount of $542,244.67 (exclusive of the item for application of water and the sum of $17,200 involved in the issue as to delay in performance), a sum substantially less than the plaintiffs' claim of $754,881.33 as to that portion of its damages as embodied in the report of their accountants received in evidence as Exhibit 64. The trial court was not, of course, required to set forth its computations showing by what method the amount of damages awarded was determined. The pertinent inquiry on appeal is whether there was substantial support in the evidence for the findings as to damages. (Gollaher v. Midwood Constr. Co., 194 Cal.App.2d 640, 649, 15 Cal.Rptr. 292.)
The plaintiffs stated in their brief (their references to the record being omitted herein):
Other arguments made as to the computation of damages relate to conflicts in the evidence and to inferences to be drawn from the evidence. The resolution of those matters was within the province of the trial court. Since the record shows The judgment is excessive to the extent of the interest allowed on the sum of $45,392.78 from September 18, 1959, until the entry of judgment on July 31, 1963, which interest is in the amount of $12,286.25. The judgment should be modified by reducing the amount of interest set forth therein from $16,941.71 to $4,655.46, so that the correct amount of the judgment is composed of the sum of $604,837.45 as damages and the sum of $4,655.46 as interest, together with costs as stated in the judgment. The judgment is so modified and, as modified, is affirmed. Each party shall bear his or its own costs on appeal.
SHINN, P. J., and KAUS, J., concur.
'Tests indicate that after processing, to meet the grading requirements, the material is suitable for imported base material, cement-treated base aggregate, gravel blanket, and plant-mixed surfacing aggregate. Some selection may be necessary to insure that the material used for PMS aggregate is sufficiently hard to pass the LART test.
'This source is well located as far as the economy of hauling is concerned considering a single source of material for the entire length of the project. With this in mind, a borrow agreement was negotiated with the property owners by the Right of Way Department for the material on the hillside Left of Station 595 D to Station 615 D.
'Tests on this material indicate that the material has the following qualifications:
Passing a 2 1/2" sieve 70"100% Passing a 1" sieve 65"96% Passing a No. 4 sieve 55"88% Passing a No. 30 sieve 20"59% Passing a No. 200 sieve 2"8% R-Value 73"78 Plasticity Index N.P.''The bidder shall examine carefully the site of the work contemplated and the proposal, plans, specifications, and contract forms therefor. It will be assumed that the bidder has investigated and is satisfied as to the conditions to be encountered, as to the character, quality, and quantities of work to be performed and materials to be furnished, and as to the requirements of these specifications, the special provisions, and the contract.
'Where investigation of subsurface conditions has been made by the State in respect to foundation or other design, bidders may inspect the records of the Department as to such investigation, including examination of samples, if any.
'Such investigations are made for purposes of design. The State assumes no responsibility whatever in respect to the sufficiency or accuracy of borings or other preliminary investigations or of the interpretation thereof and will not, either expressly or impliedly, make any guarantee of any of the same.
'Making such information available to bidders is not to be construed in any way as a waiver of the provisions of the first paragraph of this article and bidders must satisfy themselves through their own investigations as to conditions to be encountered.
'No information derived from such inspection of records of preliminary investigations made by the Department or from the Engineer or from his assistants or from the maps, plans, specifications, profiles or drawings will in any way relieve the Contractor from any risk or from properly fulfilling all the terms of the contract.
'Records of such preliminary investigations as may have been made by the Department may be inspected at the office of the District in which the work is situated, or in case of bridge construction, at the office of the Bridge Engineer, Public Words Building, Sacramento, California.'
Article (b) of section 6 of the standard specifications was in part as follows:
'When sources of materials to be furnished by the Contractor are designated in the special provisions, the contractor shall satisfy himself as to the quantity of acceptable material which may be produced at such locations, and the State will not assume any responsibility (other than that hereinafter provided) as to the quantity of acceptable material at the designated location.
'If tests have been made by the State of other locations in the vicinity, the results of such tests are available to the Contractor or to prospective bidders on inquiry at the office of the district in which the work is situated, or in the case of bridge work, at the office of the Bridge Engineer, Public Works Building, Sacramento, California. This information is furnished for the Contractor's or the bidder's convenience only and the State does not guarantee such tests and assumes no responsibility whatever as to the accuracy thereof or the interpretation thereof stated in the test records.'
Exhibit 2 (Memorandum) Exhibit 41 (Osborne Reports) % % Passing 2 1/2" sieve 70"100 100 Passing 1" sieve 65"96 88"100 Passing No. 4 sieve 55"88 84"97 Passing No. 30 sieve 20"59 33"71 Passing No. 200 sieve 2"8 .03"2.7'When, in the opinion of the Engineer, all of the acceptable material obtainable at all of the designated sources has been exhausted, and it becomes necessary to move the entire plant to another location, the State will reimburse the Contractor for the cost of moving his plant to a new source of supply and erecting the same; however, the State will not reimburse the Contractor for any expense in connection with developing the new source of material for quarrying operations. The State will also allow or deduct, as the case may be, the increase or decrease in cost due to an increase or decrease in the length of haul involved. No allowance will be made for moving the Contractor's plant from one to another of the designated sources or from one location to another at any of the individual sources named. No allowance will be made for lost time or for delay in completing the work due to moving the plant from one source of supply to another. * * *
'Should the Contractor elect to obtain material from approved sources other than those designated in the special provisions, without first exhausting the supply at the locations thus designated, he shall make all necessary arrangements with the owners and he shall pay all costs involved, including any which may result from an increase in the length of haul.'
'The basis of computation used by Respondents was generally as follows: it was shown that the plant set up at the Wilder Pit was capable of processing pit run material at the rate of 679 tons per hour; if the pit had been as represented, 468 tons of the 679 should have been usable material, the other 211 tons being waste (assuming a waste factor of 31% as estimated by Appellant's Resident Engineer); at the rate of 468 tons per hour all of the mineral aggregate products (494,742 tons) could have been produced in 1,057 hours of plant operation; however, it was actually necessary to operate the plant at the Wilder Pit for 2,829 hours, or 1,772 hours in excess of what would have been necessary if the pit had been as represented. Respondents therefore computed the actual cost per hour of operating the plant and multiplied that cost by 1,772 hours. To this was added: the cost of operating the SP Pit which would not have been necessary if the Wilder Pit had been as represented; the cost of dozing away the excess waste in the Wilder Pit; the rental value of the asphalt plant which had to sit idle on the job awaiting the production of gravel blanket, imported base material and mineral aggregate for cement treated base; and the excess cost of hauling plant-mixed surfacing from the plant to the roadway caused by the loss of Respondents' hauling subcontract because of their inability to produce the product fast enough to keep the subcontractor's trucks busy.'