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Terminal Construction Corp. v. Bergen County Hackensack River Sanitary Sewer District Authority

Decided: April 25, 1955.

TERMINAL CONSTRUCTION CORPORATION, A CORPORATION OF NEW JERSEY, PLAINTIFF-APPELLANT,
v.
BERGEN COUNTY HACKENSACK RIVER SANITARY SEWER DISTRICT AUTHORITY, A BODY CORPORATE, NOW KNOWN AS BERGEN COUNTY SEWER AUTHORITY, A CORPORATION, DEFENDANT-RESPONDENT



On appeal from Superior Court, Appellate Division.

For modification -- Chief Justice Vanderbilt, and Justices Heher, Burling and Jacobs. Dissenting in part -- Justices Wachenfeld and Brennan. The opinion of the court was delivered by Burling, J. William J. Brennan, Jr., J. (dissenting, in part).

Burling

[18 NJ Page 300] This civil action arose out of contract. The specific contract involved was entered into between Terminal Construction Corporation, a corporation of the State of New Jersey (hereinafter referred to as Terminal), and Young Foundation Corporation, a corporation of the State of New Jersey (hereinafter referred to as Young), on the one hand, and the Bergen County Hackensack River Sanitary Sewer District Authority, now the Bergen County Sewer Authority (hereinafter referred to as the authority). The contract, designated as Contract No. 1, was entered into by the parties thereto on August 12, 1949, as a result of competitive bidding. Young subsequently (September 22, 1952) assigned all its rights therein to Terminal, in accordance with their independent agreement of July 5, 1949. Contract No. 1, ante, was part of an immense sewage disposal project, known as the Joint Sewage Works for the Overpeck Valley. In the information to bidders 14 contracts were described. Of these 14 contracts, 12 were for various trunk and interceptor sewers together with manholes, meter chambers and appurtenances, and one was for alteration and refitting of the Tenafly, New Jersey, pumping station. Contract No. 1, ante, which appears to have been the principal contract of the project, provided for all equipment, materials and work necessary for the construction of the authority's sewage treatment plant in Little Ferry, New Jersey, and its acceptance by the authority in complete operating condition. The structures to be built under Contract No. 1, ante, included pump and blower house, screen chamber, grit collector and ejector, primary settling tanks, aeration tanks, final settling tanks, chlorine contact tank, chlorine building and monorail system, "Parshall

Flume," sludge digestion tanks, digester control house, primary sludge pumping station, return sludge pumping station, and pumping station in sludge lagoon, together with garage, underdrains, pipe galleries and piping, open channels, outfall sewer and headwall, landscaping, roadways and walks, outdoor lighting and fencing. It also included all structural steel, electrical, plumbing, and heating and ventilating work in the various structures above described. The bid on Contract No. 1, ante, was submitted under date of July 5, 1949, giving an "approximate" total price of $4,246,775.46 (not a binding figure, but expressly described as being merely for the purposes of comparing the bids). The form of contract recited this total price as the "estimated contract amount" and provided for the contractor to "accept as payment in full the summation of products of the actual quantities as determined by the Engineer's estimate, by the unit prices and lump sums bid."

The Overpeck Valley sanitary sewer system and sewage disposal plant were to provide sanitary sewerage disposal for a large area of Bergen County, one of the most populous counties of the State of New Jersey.

As is customary in a major enterprise such as this, detailed and meticulous specifications and terms form part of the contract. Such provisions are usually recommended and drafted by an experienced engineer at the instance of the owner, or sponsor, of the project.

The work to be performed is grounded in the principles of free enterprise and competition. The scope of such an undertaking requires those who accept the invitations to bid to be well versed, or advised, in contract law and forms together with comparable efficiency in accounting and engineering departments. Otherwise their financial doom is spelled. It is common knowledge that the owner, or sponsor, "writes its own ticket" and the competing market of contractors is obliged to bid and perform in conformity thereto, or to avoid that field of endeavor.

However, this does not mean that a contractor is not entitled to enjoy just treatment within the terms of the contract.

If it were otherwise the construction of vital public and municipal projects would suffer by the failure of qualified bidders to enter the field for fear of risks beyond those which are foreseeable. It is grave enough to meet calculated risks in good business practice. The public authority which chooses the contract terms is not exempt from the operation of the basic principle of construction of contracts, that where ambiguities exist they are to be taken most strongly against the draftsman. Jennings v. Pinto, 5 N.J. 562, 569 (1950); Moses v. Edward H. Ellis, Inc., 4 N.J. 315, 323 (1950).

With this in mind we approach the present controversy. The principal disputes herein arise out of the functioning of the site engineer (i.e., the on-site representative of the engineering firm which was the contract designated engineer), and a meticulous study of the engineer's status, duties and jurisdiction is of infinite importance here.

Contract No. 1, ante, including the invitations to bid, clearly contemplated cooperation between contractors engaged on various contract segments of the project. Mutual responsibilities required timing of different phases of the overall operations to mesh the completion of the several elements of the construction most economically and efficiently in the Authority's interests. To keep the work rolling is the objective of the project engineer.

Good and fair engineering practice required definition and classification of the work upon the order for action without waiting until "settlement day." To define or classify the various items of work arbitrarily or grossly negligently to the detriment of a cooperative contractor who desired to expedite and synchronize the performance of his scope of the work with that of other contractors would result in unjust enrichment of the sponsor.

In the last amended complaint filed, and in the answer thereto, it was claimed and admitted that the contract in question was entered into on August 12, 1949. On September 28, 1949, Terminal was ordered by the authority to commence work within ten days as required by Article 34 of the

contract (namely "at such point or points as the Engineer may designate"). The work progressed. There was dispute in the pleadings as to the date or dates of completion. It appears that much of the work was completed by September 1951; but Terminal in February 1952 was still proceeding with the work. The Authority's answer to the last amended complaint filed alleged that Terminal "had by the 11th day of June, 1952, substantially performed most of the physical work specified" in the contract and that on August 1, 1952 the engineer "issued to plaintiff a certificate of substantial completion which was revised August 6, 1952."

Terminal filed its initial complaint herein in the Superior Court, Law Division, on September 10, 1951, but subsequently filed amended complaints. The authority's answer to the last amended complaint was filed September 22, 1952. The Superior Court, Law Division, entered a pretrial order on September 29, 1952. Trial began October 15, 1952. The trial proceedings occupied 19 days, terminating on November 20, 1952, with the verdict of the jury, rendered in favor of Terminal in the aggregate sum of $454,444.32. Judgment was entered on the verdict on November 24, 1952. During the trial, however, the trial court had granted the authority's motion to dismiss two counts of the complaint. Judgment of dismissal of these counts was entered on November 22, 1952. The authority appealed, and Terminal cross-appealed, to the Superior Court, Appellate Division, which reversed the judgment in favor of Terminal and affirmed the judgment of dismissal of two counts of the complaint. Terminal petitioned for certification and the authority joined in the petition for certification, on independent grounds (having the effect of a cross-petition). We allowed certification. Terminal Construction Corporation v. Bergen County Hackensack River Sanitary Sewer District Authority, 16 N.J. 194 (1954).

INTRODUCTION

In the present case a synopsis of the pleadings and disposition made of the claims in issue by the trial court and the

Appellate Division is essential to an understanding of the questions involved.

The last amended complaint filed was in five counts, and in each count separate claims were made (none being repeated in any other count).

The First Count.

The first count alleged completion by Terminal of its work under the contract "on or about November 1, 1951" and claimed that Terminal was entitled to receive "the full amount due less 2%" which the authority was authorized to hold for a period of one year. This was alleged to be a "total of $4,634,660.43 for specific items of work, labor and material as contracted for on unit prices and bulk bid," with the authority being entitled to credit, for payments on account, $4,247,053.84, and for retained percentage, $92,693.21, a total of $4,339,747.05, leaving a balance of $294,913.38 allegedly due Terminal, and Terminal claimed interest on this balance from December 30, 1951. Terminal alleged the authority "and the engineer as referred to in the contract, willfully, illegally, fraudulently and contrary to the contract, refused to approve payments, all to the damage of plaintiff." The authority denied these allegations; asserted failure of performance by Terminal but admitted substantial completion by June 11, 1952. The authority asserted good faith and admitted liability to the extent of $57,289.60. The pretrial order settled the issues to be tried under the first count as being Terminal's claims relating to earth excavation (a difference*fn1 of $36,771 being in dispute), earth embankment (a difference*fn1 of $134,336.25 being in dispute), structural steel (a difference*fn1 of $8,540 being in dispute) and miscellaneous fabricated steel (a difference*fn1 of $16,853 being in dispute). The total of these claims under the first count was expressed in the pretrial order as $196,500.25. Against these claims, by way of counterclaim, the authority claimed credit "for

work it had to do and money it had to pay" for repairs and miscellaneous work on the portion of the project covered by this contract. There were 18 such items, a total of $22,273. In addition the authority claimed liquidated damages for 237 days' delay in completion, a total of $23,700. The authority's total claimed credit therefore was $45,973, which it had retained in addition to sums retained for post-completion maintenance.

The claims under the first count were submitted to the jury on the basis of contract liability coupled with fraud. The jury found for Terminal. The Superior Court, Appellate Division, reversed the resultant judgment, and in its opinion directed the trial court on the remand of the matter to strike all allegations of fraud. It further held that, as a matter of law, the first count should have been "dismissed" as to the earth excavation claim; that the earth embankment claim presented a jury question and should be retried; and that the structural and fabricated steel claims should have been dismissed.

The Second Count.

The second count of the last amended complaint filed alleged that the authority in violation of Contract No. 1, ante, authorized a change in a part of its premises as a result of which a large amount of water from the Hackensack River flooded Terminal's working area, thus necessitating Terminal's expenditure of excess sums of money for performance under conditions which were not normal and did not exist when it undertook the contract; that the authority "by its agent" authorized extra work in this connection, and that for this item Terminal was entitled to damages under the contract in the amount of $216,535.59 with interest from July 1, 1951. Terminal also alleged that the authority and the Engineer "willfully, illegally, and fraudulently, and contrary to the agreement, refused to approve the claim for payment for such work."

These claims were denied by the authority which also asserted that the conditions complained of were caused by

Terminal itself. The opposing contentions were reiterated in somewhat condensed form in the pretrial order. They were submitted to the jury on the contractual basis coupled with the allegations of fraud.

The Superior Court, Appellate Division, held that the pleadings and pretrial order in relation to the second count, termed the "Dewatering Operation," encompassed a jury question as to whether the work in dispute was "emergency" work within the contract, that in event of retrial the jury should be charged that if Terminal should recover any amount on this claim it should be limited to the reasonable value of the services rendered by Terminal (which the authority contended was no more than $20,000, as opposed to Terminal's claim of $216,535.59), and that the issue of fraud in this connection should have been removed from the jury.

The Third Count.

Terminal, in the third count of the last amended complaint filed, charged that the authority "by its engineer, did order the plaintiff to perform the wall concrete work, contrary to the contract," causing Terminal to expend excess sums of money, that Terminal completed this work on September 1, 1951, that the authority refused to pay therefor, and that the amount due thereon was $90,000, with interest from September 1, 1951. Fraud was again alleged. The authority denied this claim. The pretrial order recited the opposing contentions of the parties, including the authority's defense that this constituted "Extra Work" for which a written "Extra Work" order was prerequisite.

The trial court granted the authority's motion to dismiss the third count, made at the close of the reception of evidence on the entire case, but the grounds of disposition of the motion are not disclosed. Judgment of dismissal entered in this respect was affirmed by the Superior Court, Appellate Division, on the determination by that court that fraud was an issue to be removed from the jury and that no extra work order was placed in evidence.

The Fourth Count.

The fourth count was comparable to the third count, except that it related to concrete slab work, and claimed in this respect for Terminal an additional $39,560. The disposition of this count in the pretrial order, on motion to dismiss at the trial level, and in the Appellate Division, paralleled the disposition of the third count, ante.

The Fifth Count.

The fifth count contained claims by Terminal for work done at the authority's and the Engineer's request constituting "changes, additions and modifications of the contract and specifications" completed before December 31, 1951 and for which Terminal claimed $6,023.88 to be due, with interest from December 30, 1951. Fraud was again alleged. The authority asserted that any work performed by Terminal in this respect had been included in the contract items and had been paid for, that no extra work order had been obtained therefor, and that Terminal was precluded from recovery of these items by the "semi-final certificate (of substantial completion)." These opposing contentions were recited in the pretrial order (Terminal's basic claim being recited therein as $4,157.78), and after the trial were submitted to the jury (the trial court's instructions to the jury show the further reduction of this claim to a total of $2,980.55 and the record shows that during the trial some of the original items claimed were voluntarily withdrawn by Terminal). The Appellate Division held that the issue of fraud should have been removed from the jury, and that these items if not included in payments already made were "extra work" items for which no extra work order had been obtained, and therefore the authority's motion to dismiss the fifth count should have been granted.

SUMMARY OF CLAIMS

The claims of Terminal submitted to the jury (as limited by the pretrial order and the instructions to the jury),

namely, the first, second and fifth counts, totalled $416,016.39. The jury brought in an aggregate verdict on Terminal's claims, in Terminal's favor against the authority, of $414,257.71.

The verdict also made a special finding that the authority was entitled to a credit of $5,786.39, and under stipulation of counsel the difference between this sum and the sum of $45,973 which had been retained by the authority (in addition to the percentage retained for post-completion maintenance), namely $40,186.61, was added to the judgment in favor of Terminal, bringing the judgment total to $454,444.32. Interest was not specifically mentioned in the verdict and was not adverted to in the questions involved on this appeal.

THE QUESTIONS INVOLVED

The questions involved in this appeal are complex and repetition thereof verbatim in this opinion would serve no purpose. However the principal reason for reversal expressed by the Appellate Division was that the trial court erred in its instructions to the jury on the subject of agency. Included among the questions involved are the questions whether the Appellate Division correctly determined that the issue of agency of the engineer (namely, whether the engineer was an agent of the authority) was erroneously submitted to the jury, and if so, whether the error was prejudicial to the authority.

Also among the questions involved are questions whether the issue of fraud was properly submitted to the jury; whether in the absence of fraud the judgment should be sustained; whether the construction of various portions of the contract was a matter of law or an issue of fact to be determined by the jury; whether the third and fourth counts of the complaint were properly dismissed; and whether the Appellate Division erroneously decided that the trial court erred in instructing the jury upon the subject of the credits claimed by the authority.

I. AGENCY QUESTIONS

Adjectively, Terminal's questions involved include the question whether the Superior Court, Appellate Division, departed from the accepted and usual course of judicial procedure by taking cognizance of a question, submission of the issue of the engineer's alleged agency to the jury, in absence of a trial objection thereto, and in absence of assertion of this point by the authority on the appeal to the Appellate Division. Both these adjective elements are refuted by the authority, which calls attention to its broad objections to the trial court's denial of its many requests to charge, and to its "Point VIII" of its brief in the Appellate Division. We find adjectively that the Appellate Division did not err in considering this issue.

Ordinarily blanket objections to a trial court's instructions to the jury are insufficient to constitute a basis for appeal. Williamson v. Berger, 11 N.J. 500, 505 (1953). In the present case, however, the trial court gave counsel no opportunity to object before the jury retired. And when counsel sought to give reasons for sundry objections to the charge, made after the retirement of the jury, the trial court restricted their opportunity for so doing.

The authority not only objected to the trial court's denial of its several requests to charge (which included: No. 45, the statement that neither Mr. Lincoln nor Mr. Ivan L. Bogert, also a Bogert-Childs representative, had the right under the contract to issue Extra Work orders; No. 46, that the authority was a public body, and could act only by resolution; No. 48, that the engineer had no authority to extend the contract or bind the authority; No. 65, that Bogert-Childs and Mr. Lincoln and Mr. Bogert were not agents of the authority) on the ground that "they are all material," but also objected:

"We take exception as a matter of law, to your Honor's statement that an agent can have apparent authority of a public body. We do not believe that to be a correct statement of the law. We believe that people deal with public bodies at their peril, and we

believe that the law of this state is that it is incumbent upon them to determine the scope of the agency, if, in fact, one does exist. In other words, they have two obligations: to determine whether he is an agent and, secondly, the scope of his agency."

And the authority also stated to the trial court:

"We object, as a matter of law, to your Honor's statement to the jury that there is no difference between a public body and a private body, and that all of the applicable rules of law applicable to private persons are applicable to public bodies and public corporations."

Under the circumstances, the failure of counsel to give adequate reasons for their objections, inclusive of the specific reasons asserted on appeal, does not bar the appellate review of the agency question in this case. Such reasons as counsel were permitted to voice after the retirement of the jury, including the reasons hereinbefore quoted, are deemed adequate upon this question, under the circumstances of this case, in the adjective sense. Cf. Jelinek v. Sotak, 9 N.J. 19, 25-26 (1952).

Insofar as the briefs in the Appellate Division are concerned, the issue of the instructions to the jury on the matter of the engineer's agency seems to have been adequately raised, adjectively speaking.

On the merits in this respect Terminal contended that the submission to the jury of the question whether the engineer was the agent of the authority was proper.

It does not become necessary in this case to consider whether the principles of law relating to implied or apparent authority may be applied in the field of municipal, or public corporations', contracts. The issues here principally relate to construction of a specific building contract, and the general rules of law in this respect are pertinent. We have held in this respect, in Jennings v. Pinto, supra (5 N.J., at pages 569-570):

"While it is a general rule that the construction of a contract is a question of law for the court, that rule is predicated upon the absence of an issue of fact. Where the effect of a written instrument depends not merely on its construction and meaning but upon

disputed collateral facts in pais and extrinsic circumstances, the inferences of fact to be drawn therefrom are for the jury's determination."

The contract designated engineer in the present case seems to have been given a multiple status, being for some purposes, but not for all purposes, the agent of the authority. Cf. Van Buskirk v. Board of Education, 78 N.J.L. 650, 655-657 (E. & A. 1910). That this multiple status was understood by the authority is clearly demonstrable by its choice of contract terms. In the form of contract, Article 1, it expressly provided:

" Engineer, or a pronoun in place thereof, shall mean the Bogert-Childs Engineering Associates*fn2 or their duly authorized representatives, or successors, who are designated by the Authority to perform the duties of the Engineer."

The term "designated," expressed without qualification, may be used for a variety of purposes. It may mean marked, made known or pointed out. See, for example, State v. Noah, 20 N.D. 281, 124 N.W. 1121, 1126 (Sup. Ct. 1910); Colgrove v. United States, 176 F.2d 614, 617 (9 th Cir. 1949). Cf. State v. Green, 18 N.J.L. 179, 181 (Sup. Ct. 1840). Or it may be the equivalent of "appointed," People v. Fitzsimmons, 68 N.Y. 514, 519 (Ct. App. 1877), although it may under some circumstances import less stability of tenure than the word "appointed," Kaplan v. Sullivan, 290 Mass. 67, 194 N.E. 721, 723 (Sup. Jud. Ct. 1935). Cf. Hendee v. City of Wildwood, 96 N.J.L. 286, 287 (E. & A. 1921). Compare Morris Tp. v. Washington Heights Development Co., 137 N.J. Eq. 595, 598 (Ch. 1946). It also has the connotation of indicated or set apart for a purpose or duty, such as designation of an officer for a command. Mutual Discount Corporation v. Nagy, 111 N.J.L. 592, 594 (Sup. Ct. 1933). It is clear that in the present contract the engineer was given duties of different characteristics. In some instances he was

appointed as an agent of the authority to make determinations, in others he appears to have been selected as a consultant to make tentative determinations subject to the approval of his principals, and in other provisions of the contract he appears to have been pointed out as an arbiter. These various capacities were consolidated in Article 1 of the contract, as hereinbefore quoted, by the use of the term "designated." The clear intent was to avoid repetition of reference to Bogert-Childs, or its representatives, namely to avoid using specific terms such as appointed (as agent), selected (as consultant) or pointed out (as arbiter). Wherever necessary to the determination herein we shall hereinafter refer to the governing contractual provision or provisions and the construction thereof called for in respect to the status of the engineer in the particular instance.

Pertinent provisions of Contract No. 1, ante, which among others control one or more of the issues involved in this case, were as follows:

(Art. 1) "Engineer" means Bogert-Childs "or their duly authorized representatives, * * * who are designated by the Authority to perform the duties of the Engineer." (Emphasis supplied)

(Art. 1) "Extra work * * * refers to and includes work required by the Authority, which in the judgment of the Engineer, involves changes in or addition to that required by the plans," etc.

(Art. 1) "Wherever in the specifications or upon the drawings the words 'directed,' 'required,' 'permitted,' 'ordered,' 'designated,' 'prescribed,' or words of like import are used * * * the direction * * * of the Engineer is intended, and similarly the words 'approved,' 'acceptable,' 'satisfactory,' or words of like import shall mean approved by, or acceptable or satisfactory to the Engineer, subject in each case to the final determination of the Authority, unless otherwise expressly stated." (Emphasis supplied)

(Art. 11) The construction program was in the category to be "approved" by the Engineer.

(Art. 14) "Neither the acceptance by the Authority or the Engineer, or any of their agents, employees or subordinates, of the whole or any part of the work * * * shall operate as a waiver of any portion of this contract * * * or of any power or right herein reserved to the Authority or Engineer * * *."

(Art. 17) Damaged work was to be repaired by the contractor to the "satisfaction of the Engineer."

(Art. 29) The engineer was given power to explain the meaning and intent of plans, etc.; to give orders; to determine questions in relation to the construction under the contract -- to be final and conclusive upon the contractor "except as provided in Art. 1," e.g., where authority approval was expressly required.

(Art. 36) "Extra Work" could be required by the authority in writing -- by methods "approved by the Authority" including a method requiring engineer's determination when "approved by the Authority."

As we have hereinbefore observed, the engineer under the terms of this contract had a multiple status. Cf. Van Buskirk v. Board of Education, supra. In some respects the engineer was an agent, in other respects the engineer was a consultant, and in some respects the engineer was an arbiter. Compare Chism v. Schipper, 51 N.J.L. 1 (Sup. Ct. 1888); Bradner v. Roffsell, 57 N.J.L. 412 (E. & A. 1894); Gerisch v. Herold, 82 N.J.L. 605 (E. & A. 1912).

Whether the engineer is an agent, consultant or arbiter depends upon the construction of the pertinent provision or provisions of the contract. Some years ago it was said:

"Engineers have always claimed to be arbitrators between Owner and Contractor, and not the representative solely of one party. This position is a proper one, but to-day it is more of a myth than a fact. The anomalous position is brought about, not because Engineers are desirous of being unfair, but because of the agreements (or contracts) generally used, which make it extremely hard, if not almost impossible, for Engineers to be fair if they try to conform to the agreement provisions." Bamford, Agreements for Building Contracts (1910), p. 450 (Reprinted from Transactions, vol. LXVII, p. 438 et seq. (1910))

In Parker and Adams, The A.I.A. Standard Contract Forms and the Law (1954), p. 54, it is pointed out that:

"An analysis of the General Conditions will show that in a large proportion of them a definite duty is laid upon the Architect, in performing which he is acting for and on behalf of the Owner as his agent in some technical matter."

Many of these instances are demonstrated in the above mentioned treatise. There are also contract provisions adverted

to therein which are arbitration clauses. Id., p. 55 et seq. Compare Architect's Certificate as a Condition of Payment, 185 L.T. 336 (1938). The provisions of a contract may clothe an architect with the status of adviser, of agent of the owner, or of arbitrator. See American Institute of Architects, The Handbook of Architectural Practice (1943), ch. 8, pp. 19, 20; ch. 33, Art. 38- Art. 40, inclusive, pp. 59, 60.

The situation disclosed by the pleadings and proofs herein was of considerable complexity. The trial court should have instructed the jury as to the various capacities of the engineer under portions of the contract respectively pertinent to the individual counts and claims of the complaint. If there then remained a disputed question of fact which would result in the invoking or disregarding of a particular clause of the contract in reference to the agency question, that dispute of fact should have been left to the jury. See Jennings v. Pinto, supra.

The trial court's instructions to the jury on the subject of agency are concerned in the reversal by the Superior Court, Appellate Division. The appellate court held that neither Bogert-Childs nor Mr. Lincoln nor Mr. Ivan L. Bogert was an agent of either Terminal or the authority, but either (as the engineer) was an independent arbiter and that the trial court issued conflicting and erroneous instructions on this subject. The Appellate Division pointed to the trial court's emphasis on Article 29 of the contract, the trial court's recitation of the opposing contentions of the parties, its failure to instruct the jury whether Mr. Lincoln or his employer, Bogert-Childs, occupied the status of agent of the authority, and its denial of a request to charge, made by the authority, that Mr. Lincoln and Bogert-Childs were not its agents. The Appellate Division and the trial court were both in error. As hereinbefore observed, the engineer under a given circumstance may have been an agent of the authority; under other circumstances the engineer may have been a consultant, or an arbiter. The trial error was the failure to construe the contract and instruct the jury on the alternatives,

if any, open to determination on the facts with regard to agency. This error may not cause reversal of the trial court's judgment, however, unless it was prejudicial to the substantial rights of the authority. The effect of the error may be determined only after a construction of the contract as applied to each of the three counts (first, second and fifth) of the complaint which were submitted to the jury.

II. FRAUD ISSUES

The Superior Court, Appellate Division, in effect reversed the trial court's judgment and disposition of the issues in this matter, upon the determination by the Appellate Division that there was no evidence of fraud introduced in support of the allegations of the complaint as incorporated in the pretrial order. Necessarily included in the questions involved on the present appeal is Terminal's question whether the issues of fraud were properly submitted to the jury.

Adjectively the Appellate Division appropriately observed that specification of fraud is required under R.R. 4:9-1. This rule (formerly Rule 3:9-1, which applied at ...


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