an acceptance not due to such cause, which was all that was | provement, and procured necessary to prevent a reversal for insufficiency thereof by said board of public works. of the evidence. About six months later defects, ruts, and [Ed. Note. For other cases, see Municipal Corporations, Dec. Dig. § 375.*] 5. MUNICIPAL CORPORATIONS (8 368*)-PUBLIC IMPROVEMENTS · - CONTRACTS GUARANTIES OF WORK AND STIPULATION FOR RE PAIRS. Under a contract for street paving, in which the contractor warranted the work for 9 years, and which left the character and extent of the repairs under such warranty to be determined by the board of public works, where the notice to the contractor to repair was given pursuant to a resolution and order of such board, and gave the contractor complete information of the action of the board, the fact that it required the complete resurfacing of the street which was unnecessary did not relieve the contractor of liability for the cost of repairs made by the city upon the contractor's failure to make them. holes appeared in a portion of that part of the street so improved, and the condition thereof was such that said board of public works, by a resolution to that effect, ordered a resurfacing of said part of said street and other repairs thereon, and that notice of the action of such board be given to appellant. After receiving such notice, appellant failed and refused to make such repairs, whereupon they were made by appellee. This is an action by appellee to recover on its said contract for such repairs. The complaint sets out in detail the various steps taken by the board of public works in connection with said improvement leading up to the letting of the contract to appellant, and avers the execution of said contract, a copy of which, together with a copy of the plans and specifications, are each filed with and 6. MUNICIPAL CORPORATIONS (§ 368*)-PUB-made part of such complaint. [Ed. Note.-For other cases, see Municipal Corporations, Cent. Dig. § 901; Dec. Dig. 8 368.*] LIC IMPROVEMENTS CONTRACTS - GUARAN- It then avers the completion of the work within the time provided by the contract, the acceptance thereof by such board of pub Where a contract for street paving containing a warranty of the work by the contractor also authorized the city to retain a portion lic works, the adoption of the preliminary asof the contract price as a repair guaranty fund, sessment roll on April 12, 1907, and the a recovery by the city of the cost of resurfac-adoption of the final assessment roll May 6, ing a portion of the street did not prevent it from holding the balance of the fund as a guaranty for the repair of other portions of the street until the end of the guaranty period. [Ed. Note. For other cases, see Municipal Corporations, Cent. Dig. § 901; Dec. Dig. 8 368.*] 1907, and that within about six months after such completion and acceptance of said improvement it became so out of repair and in such condition that appellee by its board of public works determined that a resurfacing of the street was necessary, and served no Appeal from Superior Court, Marion Coun- tice on the appellant to make such repairs; ty; John L. McMaster, Judge. Action by the City of Indianapolis against the Barber Asphalt Paving Company. From the judgment, defendant appeals. Affirmed. that appellant failed and refused to make such repairs or any part thereof; that appellee resurfaced the part of the street in question at a cost to it of $10,763.83. Facts showing that appellant is entitled to a credit David B. Gann, George H. Peaks, and Morris M. Townley, all of Chicago, Ill., for ap-on account of material furnished appellee, pellant. Joseph B. Kealing, Merle N. A. Walker, and Newton J. McGuire, all of Indianapolis, for appellee. and on account of certain bonds held and sold by appellee under said contract, are averred, and judgment asked for a balance still due of $865.51. A demurrer to this complaint for want of facts was overruled, and exceptions saved by the appellant. Appellant filed a cross-complaint in two paragraphs, by the first of which it sought to recover the sum of $5,811.60, with interest, for asphalt sold by appellant to appellee, and by the second paragraph it sought to recover the sum of $4,086.72 upon an implied contract to pay for certain bonds of appellants wrongfully converted by the appellee. These items were the same as those set out in the complaint and admitted to be proper credits against the total cost of repairs made by appellee. HOTTEL, J. On October 23, 1905, the appellee, city of Indianapolis, through its board of public works, adopted a preliminary resolution for the improvement of a part of one of its streets known as West Michigan street. Other preliminary and necessary steps were taken by such board leading up to the confirmation of the original resolution for such improvement. The notice required in such cases, inviting bids for the proposed improvement, was given, and the contract therefor was awarded appellant May 21, 1906. Pursuant to such award, appellant and appellee on the 23d day of May, 1906, entered into a written contract, whereby the appellant, for approximately $58,000, agreed to improve said street with "Trinidad Pitch Lake Asphalt" according to the plans and specifications adopted by said board of public works. Appellant completed said imFor other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep'r Indexes Appellant filed an answer to the complaint in two paragraphs, the first being a general denial. The second paragraph of answer admits the execution of the contract sued on, and sets out in detail the character of the improvement required to be made thereun overruled and exceptions properly saved by appellant. Appellant moved to modify the judgment by striking out that portion thereof which authorized appellee to retain the said sum of $2,236.89, and to invest the same in bonds, etc. The errors assigned and relied on are: (1) The overruling of appellant's demurrer to the complaint. (2) The overruling of appellant's motion for a new trial. (3) The overruling of appellant's motion to modify the judgment. der, the materials used therein, and the man- the balance of such sum recoverable by apner of construction. The substance and ef- pellant on its second paragraph of cross-comfect of these averments in brief are that the plaint, namely, the sum of $2,236.89, should asphalt surface required by such contract is be retained by appellant and invested in of a semifluid nature, with a tendency to municipal bonds to be held by appellee as colspread in warm weather, and requires a lat-lateral to secure the faithful performance of eral support to prevent its displacement; the remaining portion of appellant's warranthat the binder course under such asphalt ty obligations. A motion for a new trial was surface is porous in character, and readily admits the infiltration of water where the conditions are favorable; and that such infiltration tends to disintegrate and break up the pavement. It is then averred that the street to be improved under said contract was occupied by the "Indianapolis Traction and Terminal Company"; that, under its franchise with the city, it was the duty of such traction company to improve its portion of said street lying between its rails and for 18 inches on the outside there of, and to proceed with such improvement at the same time appellant was proceeding with its improvement; that appellant finished its portion of the improvement in 1906; that the traction company excavated the portion of street to be improved by it in the fall of 1906, and abandoned the work of construction, leaving the excavation in the center of said street until the summer or fall of 1907; that appellee took no steps to compel the traction company to proceed with said improvement; that the absence of the pavement which should have been put in by the street car company made it necessary for appellant to construct a temporary lateral support for the improvement made by it; that for this purpose appellant placed oak headers along the edge of its pavement and adjacent to the excavation made by the street car company; that afterwards the street car company, without appellant's knowledge, removed said headers, leaving the edge of the pavement adjacent to said excavation unprotected during the following winter and summer; that such excavation was full of water which permeated appellant's pavement, and caused it to become thoroughly water-soaked, with the result that the defects appeared therein which made necessary the repairs made by appellee on said improvement for which the recovery herein is sought; that by reason of the foregoing facts appellant is not liable under its provision of guaranty for said repairs. The appellee filed a reply in denial to the special paragraph of answer. The cause was tried by the court without a jury. The court rendered judgment for appellee on its complaint in the sum of $2,000, and for appellant on its first paragraph of cross-complaint in the sum of $6,291.05, and on the second paragraph of cross-complaint in the sum of $4,236.89. It was adjudged that the $2,000 recoverable by appellee should be deducted from the $4,236.89 recoverable by appellant on its second paragraph of cross-complaint, and that [1] In support of its contention that the trial court erred in its ruling on the demurrer to the complaint, appellant insists, in effect, that the provision in the contract for the improvement of the street in question which obligated the appellant to repair for a period of nine years was in the nature of a warranty by which appellant agreed to warrant the pavement for said period against defects resulting from improper workmanship or inperfect or unsuitable materials, and that appellant, by said contract, was not obligated to make general repairs for said period; that, such being the effect of the contract, the burden was on appellant to allege and prove the specific facts constituting the breach of warranty relied on, and that the complaint in this case contains no such averments. An intelligent presentation of the question thus presented requires us to set out the guaranty provisions of the contract sued on. They are as follows: "Guaranties: The work shall be done in such a substantial manner that no repairs will be required for a period of nine years in the case of asphalt, pavements. * * Should repairs become necessary, however, during any such period, then the contractor will be required to make good any damage to the work or any defect in the workmanship, materials or condition of the work which may have occurred during said period, and which made such repairs necessary. Said contractor shall keep such work in good repair during the time of the guaranty period and shall make all repairs at such time as directed by the board of public works or the city engineer. It shall be the duty of said contractor to notify the board of public works in writing at least thirty days prior to the expiration of the said guaranty period, to inspect the work, and unless the contractor shall furnish such notice, the obligation to maintain the said work in proper condition shall continue in force until such notice shall have been fur nished and for thirty days thereafter, and | repair to the satisfaction of said board, then until such time as the contractor shall place said work in proper condition, if notified so to do within the thirty days' period. It is understood and agreed that this guaranty shall cover all repairs growing out of the imperfection or unsuitability of materials or composition, too great or too little moisture, all defects in workmanship, extremes of heat or cold and all other effects of climate, and shall cover all other excessive deteriorations more specifically described as follows: In case of asphalt, pave ments, any holes or cracks in the same, and any defects resulting from the decomposition of the wearing surface or foundation. The pavement, at the expiration of the guaranty period, shall be in good condition, present a surface so true and even that it will in no way be an obstruction to travel, and have drainage so perfect that water may collect in no place to a depth of more than one quarter of an inch. "Guaranty Repair Fund. The party of the first part hereby consents that the city shall retain, in street improvement bonds of said city, issued on account of said improvement, a sum equal to twenty (20) cents per square yard of pavement herein contracted for, which sum shall be and constitute a repair guaranty fund, in the hands of the city, for the purpose of securing the repair and maintenance of said pavement by said party of the first part to the satisfaction of the board of public works of said city for a period of nine years from the date of the final estimate on said work, and that said pavement shall be so left at the expiration of said period. Should the improvement bonds issued on account of this improvement be insufficient to make the deposit herein provided for, the party of the first part shall deposit such other city of Indianapolis improvement bonds, in lieu thereof, as shall be satisfactory to the city comptroller. It is hereby agreed that the face value of the bonds to be deposited shall at no time during the guaranty period be decreased by the contractor to an amount less than twenty cents for each square yard of pavement contracted for. In the event the pavement during the guaranty period is being maintained and kept in repair by the contractor to the satisfaction of said board of public works, then the contractor shall be permitted to receive and receipt, from time to time, for all maturing interest coupons, and at the end of such guaranty period, the bonds deposited, with all unpaid coupons, shall thereupon be delivered and turned over to said first party or assigns: Provided, however, that the contractor shall first receive from said board of public works a certificate that the said pavement is in good repair and condition to the satisfaction of said board, but not otherwise. In the event the pavement during the guaranty period is not in good condition and said board shall retain all bonds and coupons (principal and interest) until said pavement is so put in repair; and if the first party shall refuse or neglect to put the same in repair, to the satisfaction of said board, on proper written notice for them-said notice to be at least ten days-said board may cause the same to be done and collect all maturing bonds and coupons, and with the proceeds thereof pay for such repairs provided the amount so collected be sufficient, if not, said board may sell all or a part of the bonds and coupons deposited to guarantee said pavement, and apply the proceeds to the making of said repairs, or such an amount thereof as it may deem necessary, retaining the remainder of said sum, if any, in said repair guaranty fund for use in future repairs. Should the cost of such repairs made by the order of the board of public works exceed the amount collected on bonds retained as above, the party of the first part shall be held responsible to the city of Indianapolis for the amount of such excess and such excess shall be collected by suit from the contractor. The contractor failing to make a satisfactory deposit on bonds, as required in this contract, will be permitted to deposit cash, in the sum of twenty cents for each square yard laid, subject to all restrictions and conditions named above as to the bond, guaranty. [2] It is a well-settled principle that a breach of warranty pleaded as a cause of action or defense must be good upon demurrer, aver the character and extent of the warranty, and the nature and particulars of the breach. Shirk et al. v. Mitchell et al., 137 Ind. 185-188, 36 N. E. 850, 851, and authorities there cited. The serious question in this case is not, therefore, whether the principle of law contended for by appellant is correct, but whether it should be applied to a pleading of the character here involved, and, if applied, whether the averments of the complaint substantially comply with its requirements. Appellant relies on the case of Shank v. Smith, 157 Ind. 401, 61 N. E. 932, 55 L. R. A. 564, in support of its contention that the provision of the contract in suit for the repairs of the street in question must be construed as a warranty rather than as an obligation on the part of appellant to make general repairs. Appellant further insists in support of this contention that it is to be presumed that appellee and appellant, when they entered into the contract for the improvement of the street in question, intended to enter into a valid rather than invalid contract, and that, if that construction of the contract be adopted which would obligate the contractor to make general repairs, it would be equivalent to holding that the contract was invalid when executed, because the contract by its terms provided that the cost of the improve ment was payable by special assessments, | the warranty, so that the only question to and appellee had no power to levy such spe- be determined is whether the averments are cial assessments for street repairs as distin- sufficient to show a breach of such warranty. guished from improvements, and that a "spe- The provision here involved, even though cial assessment contract which included the construed as a guaranty, was more than a making of general repairs would have been guaranty against defects resulting from imunenforceable." As supporting this conten- proper workmanship or unsuitable materials. tion appellant relies on the following cases: It was, in effect, a guaranty that the mateShank v. Smith, 157 Ind. 401-408, 61 N. E. rials and the workmanship which entered 932, 55 L. R. A. 564; Portland v. Bitumin- into the construction of such street were of ous Pav. Co., 33 Or. 307, 52 Pac. 28, 44 L. R. such a character that they would withstand A. 527, 72 Am. St. Rep. 713; Boyd v. Mil- any and all the usual and necessary uses of waukee, 92 Wis. 456, 66 N. W. 603; Brown travel to which such street might be subjectv. Jenks, 98 Cal. 10, 32 Pac. 701; Alameda ed for a period of nine years, and at the end Macadam Co. v. Pringle, 130 Cal. 226, 62 thereof would be "in good condition and prePac. 394, 52 L. R. A. 264, 80 Am. St. Rep. sent a surface so true and even that it would 124; Excelsior Paving Co. v. Leach, 34 Pac. be in no way an obstruction to travel, and 116;1 McAllister v. Tacoma, 9 Wash. 272, have a drainage so perfect that water would 37 Pac. 447, 658; Verdin v. City of St. Louis, collect in no place to a depth of more than 131 Mo. 26, 33 S. W. 480, 36 S. W. 52; 1 one-quarter of an inch." This provision conPage and Jones on Taxation, § 516; Young templated that all holes and defects of evv. Tacoma, 31 Wash. 153, 71 Pac. 742; City v. Barnett, 149 Ala. 119, 43 South. 92; Barfield v. Gleason, 111 Ky. 491, 63 S. W. 964; Louisville v. Selvage, 106 Ky. 730, 51 S. W. 447, 52 S. W. 809; Gosnell v. Louisville, 101 Ky. 201, 46 S. W. 722; State v. District, 80 Minn. 293, 83 N. W. 183; People v. Maher, 56 Hun, 81, 9 N. Y. Supp. 94; Fehler v. Gosnell, 99 Ky. 380, 35 S. W. 1125; Kansas City v. Hanson, 8 Kan. App. 290, 55 Pac. 513; Scranton City v. Sturges, 202 Pa. 182, 51 Atl. 764; Bradshaw v. City of Jamestown, 125 App. Div. 86, 109 N. Y. Supp. 618. While there seems to be some difference in the wording of the repair provisions of the contract construed in the case of Shank v. Smith, and the wording of the one here involved, yet the provision there in question and construed by the court was so nearly identical with this that we would feel bound by that construction. In so far as that deçision holds that the provision should not be construed as an obligation to make general repairs, it is supported by authority. People v. Featherstonhaugh, 64 N. E. 802, 60 L. R. A. 768; McGlynn v. Toledo, 22 Ohio Cir. Ct. R. 34, affirmed 67 Ohio St. 498, 67 N. E. 1103; Lindsay v. Brawner, 97 S. W. 1, 29 Ky. Law Rep. 1236; Barber Asphalt Paving Co. v. City of Louisville, 123 Ky. 687, 97 S. W. 31, 9 L. R. A. (N. S.) 156, with notes; Owensboro City Railroad Co. v. Barber Asphalt Paving Co. (Ky.) 107 S. W. 244, 14 L. R. A. (N. S.) 1217. Assuming, then, that the provision in the contract in suit was one of guarantee or warranty and not one to repair generally, are the averments of the complaint sufficient? The complaint in question sets out the entire contract, including the guaranty, and therefore meets the requirements of the rule before announced which requires the pleading to allege the nature and extent of 1 Reported in full in the Pacific Reporter; reported as a memorandum decision without opinion in ery kind or character appearing in said street within said guaranty period resulting from any and all proper use and travel of said street should be repaired and made good by appellant. The guaranty is, in effect, a covenant obligating the appellant to make any and all repairs within the period designated resulting from any and all causes incident to the use of the street for public travel, and covers all repairs except those resulting from fire, flood, or other act of God or some extraneous cause in no way connected with the usual and proper use of such street for travel. [3] This being the effect and scope of the guaranty here involved, whether the burden was on appellee to allege in his complaint and prove on the trial a negative, viz., that the defects in the street which necessitated the repairs sued for were not the result of causes extraneous to and independent of its use for travel, or whether this was a defense to be set up and proved by appellant, may, we think, be open to serious question, but, in view of the averments of this complaint, we need not, and do not, decide this question. The averments of this complaint in this respect are that, after the completion of said work under said contract and after the acceptance thereof by said board, the wearing surface of said street pavement between Blake street on the east and the White river on the west, being about 12 street squares, "commenced to roll and wave, and in many places the vehicles using said pavement in the ordinary course of travel on said public street cut through the wearing surface and the concrete into the subgrade of said street; [our italics] that said pavement deteriorated so badly that by the early spring of the year 1908 the same was almost entirely worn out, and was in such condition that it could not satisfactorily be patched, and that, in order to put said pavement into good condition and keep the part of the street improved by ap- contract and said plans and specifications it granted the street car company, was unfor the construction of said pavement, and der any legal obligation to appellant to see fit and suitable to be used by the traveling that the street car company proceeded with public, it became and was necessary entire- its work along with appellant, and that it ly to reconstruct and relay all the portion furnished the lateral support necessary to of the wearing surface above the concrete base of said pavement, and in some places to repair and construct portions and reconstruct portions of said concrete base." We think it affirmatively appears from these averments that the part of the pavement resurfaced by appellee for which this recovery is sought was in such condition before it was resurfaced that it would not and did not withstand the ordinary travel thereon, and that the defects which made such resurfacing necessary were such as were contemplated by the guaranty provision in appellant's contract. The character of the averments are such that the only reasonable inference deducible therefrom is that the by the board of public works of said city. defects which necessitated the repairs sued for were the result of breaches of appellant's guaranty contained in the contract sued on and set out and made part of the complaint. The complaint in the respect indicated is clearly sufficient under the recent holding of the Supreme Court in the case of Domestic Block Coal Co. v. De Armey (Sup.) 100 N. E. 675. This same question is presented in another form in the discussion of the assigned error presented by the motion for new trial. The grounds of this motion are: (1) The decision of the court was contrary to law. (2) The decision of the court is not sustained by sufficient evidence. [4] It will appear from the averments of appellant's answer before set out that it proceeds upon the theory that the defects in the street in question which necessitated the repairs made thereon were the result of the acts and conduct of the street car company, and that such repairs were not made necessary on account of any defect in the material or workmanship in the original construcAppellant in tion of the paving material. its discussion of the ruling on the motion for new trial insists that, upon the issue presented by this answer, the decision of the court is not sustained by sufficient evidence, and is contrary to law. There is considerable evidence which supports appellant's contention that the defects in the street in question, which made necessary the repairs for which appellee seeks a recovery, were due to, and the result of, the character of the lateral support placed along the edge of the part of the street improved by appellant, and adjacent to that part of the street excavated by the street car company, and to the after removal of such support by the street car company, thereby leaving appellant's improved part of the street without lateral support, and exposed to the infiltration of water collected in the excavated part of said street. The evidence, however, does not disclose that appellee by reason of its contract with appellant, or by reason of the franchise which The evidence discloses that appellant and the The repairs on the part of the street in question for which a recovery is sought cost the appellee $10,763.83, more than $5,000 of which sum was represented by material furnished by appellant and represented by the judgment which it recovered on its first paragraph of cross-complaint. Appellee recovered on its complaint only $2,000. There was some evidence tending to show, or from which the court might reasonably infer, that a part of the repairs in question were made necessary both on account of defective material, and improper lateral support put in by appellant. There was some evidence tending to support all the material averments of the complaint, and this is enough to prevent a reversal on the ground of the insufficiency of the evidence. For the reasons indicated, we cannot say that the decision is contrary to law. [5] Some question is made because the notice served upon appellant was a notice to repair by completely resurfacing the street, and it is claimed that the evidence shows that such resurfacing was not necessary. This objection is not tenable. The character and extent of the repairs, by the terms of appellant's contract, was left to the board of public works, and the repairs were to be made to its satisfaction. The complaint al |