# Petition for Writ of Certiorari — Rau Construction Co. v. Phillips Petroleum Co.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1942
- **Citation:** 317 U.S. 685

## Text

Supreme Court of the United States a |

OCTOBER TERM, 1942.

503

DS cauccarstrns

RAU CONSTRUCTION COMPANY, A CORPORATION,
PETITIONER AND APPELLEE BELOW,

VS.

PHILLIPS PETROLEUM COMPANY, A CORPORATION,
RESPONDENT AND APPELLANT BELOW.

PETITION FOR WRIT OF CERTIORARI TO THE UNITED
STATES CIRCUIT COURT OF APPEALS FOR
THE EIGHTH CIRCUIT, AND BRIEF IN
SUPPORT THEREOF.

Maurice J. O’SULLIVAN,
700 Gloyd Building,
Kansas City, Missouri, —

Attorney for Petitioner.

INDEX

Petition for Writ of Certiorari

Summary and Statement of the Matter Involved.
Statement of the Basis of Jurisdiction
Questions Presented for Decision... DRS TLS

Reasons Relied On for Allowance of the Writ—

I. The decision on appeal fundamentally erred
in basic questions of substance and of special im-
portance in the permanent public interests and
in the public interests particularly affected in
the present emergency.

The opinion contravenes good morals, public
policy and Engineering ethics. It rewards the
authorized deceit of Phillips Petroleum Com-
pany, but denies the simple arithmetic and
common sense clearly demonstrated in trial
Findings.

The errors gravely affect the Construction
Industry and the Engineering Profession. Every
concept of ‘‘unit price” construction contracts is
nullitied. That important type of engineering
contract is designed to avoid delay to wait for
detailed plans.

The Construction Industry is endangered by
the approval of fraud, where it may readily be
perpetrated, as the facts here illustrate. The
Engineering Profession is bewildered by the de-
cision.

The District Courts of the Eighth Circuit
are obliged to grant others the fruits of deceit
in inducing ‘“‘unit price” construction contracts.

The decision erred in ignoring lawful trial
Findings and in refusing to apply the controlling
‘Missouri law and the same law declared at the
same Term, to govern other litigants. Justice
and equal protection of laws was thereby denied,
contrary to the accepted course of judicial pro-
a and to the law repeatedly declared

ere.

II INDEX

There is a firm faith in this Court to decide
the questions and to correct the basic errors
made on appeal or, otherwise, the now vital
Construction Industry would be paralyzed and
an unfavorable reflection of the United States
Courts would follow, contrary to the public in-
terests and the interests of the Judicial System

A. Basic errors on appeal

B. The engineering purpose and design of
“unit price” type of contracts and their
vital importance now i

C. The denial of equal protection of laws and
other errors on appeal

Prayer for Writ

Brief in Support of Petition

I. Opinion Below____--
Il. Jurisdiction ——
III. Statement of the Case

IV. Specifications of Error___...-----
V. Summary of Argument.

Argument) —__$_____-_—

Conclusion

TABLE OF CASES

Aero Spark Plug Co. vs. B. G. Corporation, 130 F. 2d
290, 295
American Insurance Co. vs. Scheufler, 129 F. 2d 143__
Armstrong vs. Winfrey, 61 Mo. 354, 357
Brown vs. Worthington, 142 S. W. 1082, 1. c. 1084,
Subds. 1, 2, 162 Mo. App. 508
Chicago Mill & Lumber Co. vs. Tully, 130 F. 2d 268,
274, 275
Collins vs. Lindsay, 25 S. W. 2d 84, 1. c, 90 (Mo. Sup.)
Dale vs. Pierson-Brewen, 142 S. W. 745, 1. c. 747, 160
Mo. App. 314

DeLange vs. Ogden, (Tex.) 106 S. W. 2d 385, 391,
Subd. 10 ieeae

18
19

21

22
24

25
25
25

25
25

26
30

19
23
28

27

23
28

30
30

INDEX Ir

Deputy vs. DuPont, 308 U. S. 488, 497, 84 L. Ed. 416,
423, Subd. 6

Dubinsky vs. Lortz, 129 F. 2d 669, 673 23
Erie R. R. Co. vs. Tompkins 14

Fidelity Union Trust Co. vs. Field, 311 U. S. 169, 85
L. Ed. 109

Fitzgerald vs. Barker, 85 Mo. 13, a c. 22 ae
Fuhler vs. Gohman & Levine Const. Co., 346 Mo. 588,
142 S. W. 2d 482, 1. c. 484, Subd. 4.00 5, 29

Gillioz vs. State Highway Commission, 153 S. W. 2d 18,
oe, Dunes. 3. 4 (aes; Bb.) ee
Goodrum vs. State, 158 S. W. 2d 81, 1. c. 85, Subds. 1-5

st) 27
Griffin vs. McCoach, 313 U. S. 498, 85 L. Ed. 1481. 11, 21
Grigsby vs. Stapleton, 94 Mo. 423, 7S. W. 421, 423 30
Guerini Stone Co. vs. P. J. Carlin Const. Co., 248 U. S.

334, 343, 63 L. Ed. 275, 284__. ie 12, 27

Horwitz vs. Schaper, 119 S. Ww. od 474, 1. c. 480, 482
(Mo. App.)
Jesse vs. Roloff, 74 S. W. 2d 890, 1. c. 893 (Mo. App.)_..._ 29
— : Mills vs. Bell, 37 S. W. 2d 680, 1. c. 684 (Mo.
pp.
Judd vs. Walker, 114 S. W. 979, Subds. 5-6, 215 Mo. 312 28
Klaxon vs. Stentor Elect. Mfg. Co., 313 U. S. 487, 85

L. Ed. 1477, 1480 12, 21
Law vs. U. S., 266 U. S. 494, 496, 69 L. Ed. 401, 402___ 11
Layne & Bowler Co. vs. Western Well Works, 261

U. S. 387, 392, 67 L. Ed. 712 11
Luikart vs. Miller, 48 S. W. 2d 867, 1. c. 868, 869 (Mo.

Sup.) 28
Magnum Import Co. vs. Coty, 262 U. S. 159, 163, 67

L. Ed. 922_... 11
McClintock vs. Skelly Oil Co., 114 S. W. 2d 181, l.c.

189, Subds. 6-12, 232 Mo. App. 1204 29
Metropolitan Paving Co. vs. Brown-Crummer Inv.

Co., 274 S. W. 815, 309 Mo. 638 (En Banc)... 28
National Theatre Supply Co. vs. Rigney, 130 S. W. 2d .

258 (Mo. App.) 28
Osler vs. Joplin Life Ins. Co., (Mo.) 164 S. W. 2d 295,

Subd. 7 28

Pecheur Lozenge Co. vs. Nat. Candy Co., 315 U. S. 666,
86 L. Ed. (adv.) 739 12

IV INDEX
Phillips & Colby Const. Co. vs. Seymour, 91 U. S. 646,

23 L. Ed. 341 12, 27
Picard vs. United Aircraft Co., 128 F. 2d 1. c. 641. 19
Pope vs. Allis, 115 U. S. 363, 1. c. 371, 29 L. Ed. 393,

1. c. 398 ae
Progressive Finance Co. vs. Stempel, 95 S. W. 2d 834,

836 (Mo. App.) Subds. 4-6 28
Rabenau vs. Harrell, 278 Mo. 247, 213 S. W. 92. 1. c. 93,

94, Subd. 7_ sae <a
Redlands Orange G. “Assn. - vs. . Gorman, 161 Mo. 203,

5 8 2 PE OL’. RS enn east ee 29
Rexford vs. Philippi, 84S. W. 2d 628, 1. c. 631, Subds. 3,

4, 337 Mo. 389... 29
Rice vs. Lammers, 65 S. W. 2d 151, Subds. 3-5 (Mo.

App.) 28
Roosevelt vs. Mo. State Life Ins. Co... 14, 23
Schaefer vs. Fulton Iron Works, 158 S. W. 2d 452, 1. c.

455, Subds. 1-3 (Mo. App.) 27
Spitscaufsky vs. State Highway Commission, (Mo.

Sup.) 159 S. W. 2d 647, 654, Subd. 5, 656, Subds. 10,

12, 651, ie Ae Sevens 29, 30
State ex rel, Cary vs. Trimble, 43 &. W. 2d 1050, 1. c.

1054 28
State Farm Mutual Auto Ins. Co. vs. Coughran, 303

U. S. 485, 487, 82 L. Ed. 970, 972, Subd. 1... 11
State ex rel. Hughes, 152 S. W. 2d 193, 1. c. 196, Col. 1,

and Subds. 4-7, 1. c. 198 (Mo. Sup.) 29
Stone vs. White, 301 U. S. 532, 534, 81 L. Ed. 1265,

p | SOAR OTERO Rt SoS NTRS T 12; 27
Taggart vs. School District, 96 S. W. 2d 335, 337, 339

Mo. 223 28
United Const. Co. vs. City of St. Louis, (Mo.) 69 S. Ww.

2d 647, Subd. 9 19
United States vs. Bethlehem Steel Corp., 315 U.S. 289,

86 L. Ed. (Adv.) 521, 1. c. 540-543 27
United States vs. Butler, 297 U.S. 1, l. c. 71, 80 L. Ed.

477, 1. c. 490 27
United States vs. McMullen 23
Wentzel vs. Lake Lotawana Dev. Co., 48 S. W. 2d 185,

Subds. 4, 12, to 51 and 33 30

Wright vs. Fuel Oil Co., 114 S. W. 2d 959, 1. c. 961,
962, 342 Mo. 173

INDEX

TEXTBOOKS

Annotation, 76 A. L. R. 269
Annotation, 112 A. L. R. 1224, 1236, 1238, 1239, 1240__
9 C. J. 695, n. 32; 697, n. 64, 68, 69.
17 C. J. S. 502, Sec. 147__.
17 C. J. S. 762, Sec. 325, n. 37; page 366, n. 78; page 367,

n. 92; page 369, n. 1; page 455, n. 85
17 C. J. S. 772, n. 61, 58...
Federa! Rules of Civil Procedure, Rule 52 (a)...

Secs. 216-218; 340-341. Engr. & Arch. Juris., J. C.
Wait, M.C.E. Cornell, LL.B. Harvard, 1st Ed...

Vol. 7, Encyc. Americana 469-70 (1941), Concrete Con-
struction

STATUTES

U.S. C., Title 28, §§347 (a) and 377
U.S. C., Title 28, §§773 and 875

Court RULES

Supreme Court Rules, Rule 38

11

a

Supreme Court of the United States

OCTOBER TERM, 1942.

I widiinabidorenannaine

RAU CONSTRUCTION COMPANY, A CORPORATION, |
PETITIONER AND APPELLEE BELOW,

. WB.

PHILLIPS PETROLEUM COMPANY, A CORPORATION,
RESPONDENT AND APPELLANT BELOW.

PETITION FOR WRIT OF CERTIORARI.

To the Honorable the Chief Justice of the United States
and the Associate Justices of the Supreme Court of
the United States:

Your Petitioner, Rau Construction Company, a cor-
poration, respectfully shows to this Honorable Court:

SUMMARY AND STATEMENT OF THE MATTER
INVOLVED.

1. An Eighth Circuit opinion of August 19, 194. (R.
1987; 130 F. 2d 499), reversed judgment of $140,582.53 al-
lowed petitioner, as quantum meruit value of concrete
construction work, accepted November 14, 1939, by Phil-
lips Petroleum Company, as a small part of a seven million
dollar refinery extension and polymerization “program,” at
Borger, Texas (R. 94). Petitioner’s loss on reversal ex-
ceeds $150,000. The grave errors of substance and of spe-
cial importance in the public interests, and in the interests
of the Construction Industry and Engineering Profes-
sion, which outweigh in importance even the loss affect-
ing petitioner’s solvency, are summarized, with the opin-
ion, in “Reasons Relied Upon,” infra, p. 18, and are not
here repeated.

Z
«

2. An April 10, 1939, “unit price’”’ construction con-
tract was induced, before structure plans were completed,
by false engineering information and a false “cross sec-
tion,” supplied by Phillips’ Engineer, acting in the scope
of his employment. All information given was solely
within Phillips’ knowledge. That it was given, but was
“not accurate” and “not intended to be accurate,” and
that the “cross section” was not “intended to consti-
tute a true and representative ‘cross section’ of the work
to be done” is affirmed by Paragraphs 4 to 23 (R. 61, 66)
of Phillips’ prolix trial Answer. Part of the information
was supplied in Oklahoma (Par. 13). The April “con-
tract” was signed by Mr. Gus Rau and delivered in Mis-
souri (Par. 17, R. 65). Paragraph 20 and Exhibits to
Answer, pages 72, 74, concede that before the Missouri
contract was delivered, plaintiff assumed all of the liabil-
ities of Phillips’ project. Paragraph 15, R. 45, of the orig-
inal Answer admits performance by plaintiff and accept-
ance by Phillips. Findings 12, 15 and 19 (R. 1905, 1909)
establish that the assumption of liabilities was made vol-
untarily, to save Phillips a bond premium (about $4,000).
In assuming the liabilities and in taking over the work on
May 18, 1939, under its assumption of liabilities, at the
request of Mr. Rau and with Phillips’ consent, plaintiff
relied, and was entitled to rely, on the truth of the rep-
resentations made to Mr. Rau (plaintiff's officer and a
director). The financial statement (R. 73), attached to
Phi'lips’ Answer, discloses the inevitable effect of the re-
versal. Reliance by plaintiff or Mr. Rau on the “infor-

1From Annotation, 76 A. L. R. 269:

“It may be further observed that apparently, as to con-
tracts undertaken upon the unit basis, as distinguished from
contracts in gross, special importance is generally attached to
the work being other than as defined; for in many of such
cases the contract may be readily interpreted as one to per-
form only work of the indicated character.”

From “Concrete Construction,” Vol. 7, Encye. Americana 469-
70 (1941):

“The cost of concrete depends on the cost of cement, sand
and stone, upon conditions of work and size of work. Where
forms are simple, costs range from $5 to $10 per yard. Thin
sections with expensive forms and handling may bring this
up to $25 per yard. A reliable estimate must take account
of all of the circumstances.”

Italics where used throughout, are ours.

3

mation” is denied, but on that narrow fact issue, the trial
court, of long and expert experience in engineering and
construction cases, determined by Finding 15 (R. 1906):

3.

“From all of the evidence and inferences properly
drawn therefrom, the only possible logical finding is
that defendant furnished information substantially as
claimed by plaintiff, without determining or knowing
that it was true, and after undertaking to furnish in-
formation failed to make full disclosure of the facts;
that Gus Rau, Jr., and plaintiff relied thereon and
were entitled so to do, and that the information given
and withheld substantially deceived Mr. Rau and
plaintiff and misrepresented the nature, size and kind
of work done, and damages resulted therefrom to
plaintiff. Mr. Gus Rau, Jr., in signing the ‘form of
contract,’ and plaintiff, in assuming liability to de-
fendant and when it did the work, both relied on the
representations made” (No. 15, R. 1906; cf. 1938-45).

Finding 8, R. 1904, determined (omitting immaterial
words):

“Defendant knew that the information was
sought as a basis to propose ‘unit prices.’ The ex-
pected average cubic yards of concrete, with the other
information given, intimately and directly affected the
costs of doing the proposed work and the amounts to
be bid therefor. Materiality was known to defend-
ant. Mr. Hubbell testified (that) the size of items
was a factor affecting costs. If he read further from
the ‘cost estimate’ the later figures would disclose
smaller units, as most of the items read represented
larger ones. Full disclosure of all facts available to
and known by defendant was not made. Amended
Answer, Third Defense (R. 62) speaks for itself,
and need not be repeated.”

Finding 7 (R. 1903) and Mo. 19 (R. 1909) establish
that correct engineering computations made on the
information given were used for the “unit prices” in the
April “contract.”

*Mr. Rau (R. 1938-45) testified that an engineering “cross-
section” should uniformly apply throughout a job. Phillips’ En-

4

4. The Conclusions of Law establishing invalidity
of the April “contract” and of a June 17th price mem-
orandum, are not mentioned on appeal (R. 1931, 1932;
R. 1922). All reference to Findings establishing compul-
sion and duress of goods are omitted. The reason there-
for can only be the inevitable felo de se, following any
mention of either. Finding 20 and Finding 24 (R. 1910
and 1917) (omitting immaterial words) read:

“About June 16th, 17th and 18th, 1939, meetings
were held at the work site. Defendant threatened to
‘take over the job’ and hold all money until comple-
tion if the work was not speeded up.

Plaintiff had set up a central ready mix concrete
plant, and assembled a quantity of material, tools
and equipment, all located in defendant’s fenced-in
premises to which access was had only when passed
by a gate watchman. Commitments were made for
other material. Part of the work was incomplete. It
was impractical for plaintiff to discontinue the work,

gineer Hubbell said that the figures which he had read represented
approximately 2,500 yards and “we could consider the rest of the
concrete to be the same” average size.

The “cross section” and engineering information was relied on
to compute the average unit sizes, nature and conditions (which
are the “cost factors”) of the project as it was thus represented.
The prices computed are specified in the April “contract” (R. 14).
The computations are detailed, R. 231-33, 261-268, and appear in
Exhibits 2 and 3, R. 239, 257. The number of concrete pours for
about 2/3 of the items was discussed with Phillips (R. 1498, 1499,
1501). Finding 7, R. 1903, determines that the computations were
made correctly and Nos. 15 and 19, R. 1506-09, that they were
properly relied on. The average size of structures determines the
number of work operations. Finding 26, R. 1918, details the 9,485
excess work operations required to build the actual project, over
and above the number needed for the represented project. Finding
27 shows the added, required hand excavating. Cf. Phillips’ evi-
dence in substantial support (R. 1666-9).

“Section” is defined as “a representation, picture or drawing,
showing something, as a building, machine or geological formation
as it would appear if it were cut by an intersecting plane and the
portion between the observer and the cutting plane removed;
sometimes, also the thing itself, if so treated and viewed.” ‘“Repre-
sent” is defined as “To bring before the mind; portray, whether
by language, pictorial art, or in some other way.” Standard Dic-
tionary (1941).

a

_

a

then or later, because of requirements insisted upon
by defendant, or its failure to pay, or for differences
between the work required and the original repre-
sentations.

“Conferences were held on June 20th and July
Ist. Defendant again threatened to ‘take over the job’
and demanded that plaintiff pour approximately 2,200
cubic yards of concrete in the next 15-day period,
and insisted that plaintiff go on with the work.* Pay-
ments were still considerably in arrears. Plaintiff
was obliged by the situation to proceed regardless of
the lack of justification of defendant’s demands, and
additional expense caused thereby” (1,789 cubic yards
per month represented orderly progress. No. 23, R.
1915).

5. Answer (R. 68) affirms that when Phillips
“threatened, as it did,” etc., that plaintiff “speeded up”
the work. The conclusion is pleaded that plaintiff is
thereby estopped; that it thereby waived fraud and rati-
fied the April “contract.” Proof of fraud and compulsion
came even from Phillips’ Chief Engineer (R. 1861, 1862), who
naively testified: ‘I don’t know whether you call it
threatening. I just told them. Q. Twice on June 15 and
June 30? A. That is right”—and he continued: that it
was a true statement, that a simple order to the gate watch-
man would put plaintiff outside of Phillips’ fence (R.
1862). Finding 5 (R. 1901) confirms his knowledge of
the facts, when the “cross section” differences and an in-

The opinion says (R. 1992):

“The evidence shows that appellant, instead of abandon-
ing the contract, insisted always upon its performance.”
This is the one place where the opinion agrees with any part of
any Finding. Cf. R. 1862. It overlooks Finding 33, R. 1921, which
clearly establishes abandonment or breach of a construction con-

tract, both under Missouri and general law. The opinion says
“it is difficult to attribute importance to (the) finding that
the parties abandoned the contract or that the appellant
breached it” (3). R. 1991.

Finding 33 expressly states that it is made in the alternative,
that “even if it could be held that the ‘form of contract’ was or
ever could have become a valid obligation, nevertheless, the
evidence establishes that it was in fact abandoned by the parties.”
Cf. Fuhler v. Gohman & Levine Const. Co., 346 Mo. 588, 142 S. W.
2d 482, 1. c. 484, subd. 4.

a

6

voice therefor was presented to him and Engineer Hub-
bell, who supplied the “cross section.” He exclaimed,
“Gus, if what you tell me is true, then we have no con-
tract” (R. 153, 176, 1811, 1812, 1820, 1858). However, he
“didn’t put any importance to the matter,” and Mr. Hub-
bell was never asked until after suit about what informa-
tion he gave (R. 1858).

6. Phillips paid less than $15,000 when plaintiff had
in excess of $150,000 in cash and commitments invested
(No. 21, R. 1910). Over 100 concrete form carpenters
were recruited from distant points because of the ‘“‘speed
up,” but soon not even ten could keep busy (No. 23, R.
1915). No independent Engineer was designated to pre-
pare plans. Phillips supplied them, but in peaks and
valleys, for 10,735 cubic yards of concrete, of the 12,000
originally approximated (No. 23, R. 1915). An aggregate
of 215 changes in about 500 plans were made after issue,
although field orders to build accompanied the plans (No.
17, No. 23, R. 1909, 1915; R. 1848; 1629; Ex. 5, R. 271).
Numerous “hold work for revision” orders increased plain-
tiff’s costs. These destroyed orderly progress of the work for
plaintiff,‘ while Phillips “made up its mind” about “the sub-
ject matter of the work to be done” (No. 16 to 18; R.
1906-1909). Some plans followed manufacturer’s advice,
obtained later when machinery was purchased (No. 9, R.
1904). The work ended November 14, 1939, instead of
September Ist, or 15th, as represented. Phillips then ran
out of plans and released plaintiff. Plaintiff sought its
release before September (No. 23, R. 1916), but from early
June Phillips exerted duress. A project of different na-
ture, conditions and unit sizes was thus procured (No.
33, R. 1921). Large concrete units were built during the
job and after it ended, by others. The April “contract”
supplied no method to determine inclusions or exclusions.
There was no possible “meeting of minds” on “the sub-
ject matter of the work to be done,” and such Finding is
made as a fact (Nos. 16, 17, No. 9, R. 906, 904).

4Phillips’ Engineer Wise (R. 1635) explained:
Q. “Well, Phillips consulted its own convenience in ordering
out the progress of the work to be done?”
A. “It was our job and Rau was working for us.”
(That attitude may be proper under a “cost plus” contract,
which is the cnly type Phillips could have procured, if a true dis-
ciosure of the facts had been made.)

—

7

7. Differences between the work and the represented
“program” could not be determined until completion,
because of promises of plans for numerous large (and
more profitable) items shortly to be issued (No. 25, R.
1917). The work completed averaged less than 3 instead
of 19 cubic yards per concrete pour; less than 110 instead
of 700 square feet per form set-up. The ratio of hand to
machine excavating was 109:98 instead of 20:80. Com-
pleted unit sizes were smaller; the required methods dif-
fered. Additional expensive hand excavating was re-
quired. A total of 9,485 separate, additional work opera-
tions, with added hand excavating, all aggregating $88,-
481.50 in value, directly resulted because of differences
between the completed and the represented job (No. 23
to 27, R. 1915-1919). Exhibit 46 (R. 1467) details the
value of additional work of $124,093.84, with overtime and
admitted items excluded. The completed project required
plaintiff to perform over six times the number of costly
work operations, above the number correctly computed for
the falsely depicted job (No. 26, R. 1919).°

8. Unnecessary overtime of $4,392.20 was ordered by
Phillips, for its convenience, knowing of the added costs
(No. 23, R. 1914). Nothing was paid therefor. Only
$230.60 for overtime is included in Phillips’ judgment con-
sent (No. 1, R. 1898). $230.16 for fine grading, etc., caused
by changes in plans (No. 28, R. 1919), and $152.98 for
tooled edging, not shown on the plans, and ordered after
Phillips was advised of the cost (No. 29, R. 1920), were
allowed. All are outside of any express contract term.
They are not mentioned on appeal, but are reversed. Re-
lief was denied on prayer for rehearing (R. 2001).

9. Trial was of the simple quantum meruit issues in
assumpsit. The trial court twice stated the issues, at R.
89, and in Memorandum Opinion (R. 1871). After profert
and oyer, Phillips asked terminer of the April Missouri
contract, and of a June 17, 1939, Texas memorandum, with
19 price paragraphs, but none of its paragraphs were directly
in issue. That memorandum was written by Phillips’ Chief
Engineer and was signed at the mid-June meetings where

5Cf. R. 265-9; Ex. 7, 297; Ex. 5, 271; 369-372; Ex. 11, Vol. 4:
793-829; 1449-1458; Ex. 16, 831; Ex. 20, 835; Ex. 21, 851; Ex. 22,
855.

ars

LESAN INS ED I

8

the threats were made. It was invalid for duress and for
the fraudulent promises made and not intended to be per-
formed (Findings 21 to 25, R. 1910). Plaintiff asked no
_ determination of its invalidity but used it, with other evi-
dence, to show reasonable value of concrete forms and
panels, which plaintiff built but never got to use (and
did not get paid for), because of Phillips’ 215 changes in
plans. Finding 22 (R. 1911) allowed $35,597.16 therefor.
See Questions Presented No. 5, infra, p. 15. Because
Phillips asserted a defense under June Paragraph 4
(which was denied by Finding 22), it exactly followed
the common law rules designed to require express con-
tracts (when fully performed on one side) to be filed in
court, so that the determination of their validity, as a de-
fense, could be governed by equitable principles at law,
without resorting to the competing Chancery Courts. The
determination, made at Phillips’ request, was: Neither
April nor June “contracts” are valid as a defense (Con-
clusions denied, R. 1931; given, R. 1922). The composite
case reversed (according to the opinion) is quantum me-
ruit and for damages for fraud and deceit, damages for
breach and damages for abandonment (R. 1988). Phillips,
and the opinion, assert the June “contract” supplemented
that of April. If so, it supplemented a nullity and a fraud
and was stillborn. Its obvious and only purpose was to
fix a “‘price ceiling” for “extra” and ‘‘additional” work re-
quired, for which Phillips was clearly liable. The “extra
work” (particularly the $35,597.16 allowed by Finding
22) was payable 30 days after the job ended (Par. 35, R.
15). The alleged defense was designed in June. No rec-
ords of form losses were produced by Phillips. It pre-
ferred concealment. Assuming validity on appeal, of the
June “contract” without discussion, was simple, after life
was conferred on the void April “‘contract.”” Discovery of
“accord and satisfaction,” “compromise and settlement”
and “accounts stated’ (although never pleaded below,
and despite their denial by Phillips’ own evidence) also
were no problem. Long after trial, at oral arguments
carefully heard in the trial court (R. 1878), before finally
filing his indicated Findings, for the first time Phillips
then announced that it had “dug up a case” (R. 1891) and
asked for a Conclusion, that, if the April and June con-
tracts were invalid, its “‘extra work orders” were binding
contracts. These were never used to order “extra work,”
as specified in April Contract, Paragraph 5 (R. 6), how-

9

ever (R. 1659-62). Phillips prepared them for everything,
after the work was done. That Conclusion was denied
(R. 1932). Finding 32 (R. 1921) determined that the
“extra work orders” were nothing but field memoranda,
and ends with a Conclusion of Law, reading, “There is
nothing in the entire evidence on which a waiver, ratifi-
cation or an estoppel by plaintiff may be predicated.”
Finding 25 (R. 1917) determined that fraud was not dis-
covered until completion. At R. 2032, it was carefully
pointed out that the trial court conducted his own exami-
nation to determine the facts, that the hand excavating,
done early in the job, was at Phillips’ request, to avoid
damage to concealed pipes. Phillips paid for that until
the June memorandum was signed; thereafter no pay-
ment was made but the same work was compelled.

10. That plaintiff derived no benefit from the June
agreement, or that any April “unit price” was increased,
is denied by Phillips’ Chief Engineer (R. 1809, 1814),
who discusses the items of “extra work” or “additional
work,” for which he set a “price ceiling” in the June
memorandum. That there was no accord or satisfaction
from checks or “statements of estimates” (a mere list of
“extra work orders’) is denied by the Record, Findings
and Phillips’ evidence. Stipulation (R. 1089) shows that
the only endorsement on checks was: “In full settlement
of the within account.” R. 1090-91 is a copy of Phillips’
financial records, and lists every check. It definitely es-
tablishes there was never a check issued by Phillips, for
$2,010.23, with an accompanying statement, or for any like
amount (cf. Opinion, R. 1994). Phillips’ Exhibit 45 (R.
1366; its Exhibit 40, R. 1244); its Chief Engineer (R.
1820-22, 1937); and its Engineer Hubbell (R. 205-207) all
deny the conclusions on appeal (R. 1993), that a settle-
ment of the claims in suit followed the acceptance of any
check. The two checks received after completion are
shown in the above letters and records. They were paid
for Phillips’ benefit, to discharge lienable bills at its re-
quest, and a list thereof was furnished as agreed (R. 1820,
1837, 205). The express agreement is established by Phil-
lips’ evidence and by Finding 5 (R. 1900), that every
claim in suit would remain open, without prejudice, until
a meeting with Phillips’ Mr. Riney, at Bartlesville, which
was held December 20, 1939, or exactly seventeen days
after receipt of the last check accepted. Plaintiff’s men
went there at their own expense at Phillips’ request. The

10

only check ever offered as final settlement was for $1,-
787.51, dated, December 21, 1939, which was promptly
returned (Exhibit 4, R. 1244). Finding 1, R. 1899, es-
tablished from the evidence, for the first time, just what
items were included in Phillips’ judgment consent. It
also finds that the original answer admitted $2,108.53 and
not $2,010.23. April “contract,” Paragraph 35 (R. 15),
specifies that all payments, except the final one, are only
“estimated to be due.” Final payment was due 30 days
after completion (or December 14th) and then only after
Phillips’ Engineer certified to the whole value of all “‘con-
tract” and “extra work,” which has not yet been done.
The last check accepted was December 3, 1939.

11. Finding 1 (R. 1898) determined that jurisdic-
tion was based on diversity of citizenship. There is no
intimation of that on appeal, nor is there anything to in-
dicate a Missouri contract for Texas work, induced by
false representations made in Oklahoma and Texas.

12. These matters were urged on original hearing
and in petition for rehearing (R. 2030, 2040). It was
overruled, without comment and without correction of
plain errors of fact. The opinion is not only without
record confirmation but it is expressly denied by Phillips’
evidence and financial records, as stated. These and the
many anomalies presented under “Reasons Relied Upon”
(p. 18) seem to differ with the accepted course of recog-
nized judicial proceedings in United States Courts.

13. Nothing was overlooked, for Phillips. The trial
answer of November 13, 1940 (R. 69), was to the com-
plaint filed January 2, 1940. Under Missouri law that
was demand, to start interest. By Texas law, interest
started January 1, 1940. Answer, Paragraph 23 (R. 66),
admitted $2,010.23 was due and consented to such judg-
ment, with costs. The directions on reversal require judg-
ment entry of $2,010.23, but on filing the mandate. In-
terest was disallowed on even that. Phillips did not bring
its falsely represented conditions, integral to the contract
subject matter, into existence. It had no contract with
mutuality of obligation to enforce. Fraud and duress un-
justly enriched it and it obtained a further bonus in the
high premium paid by plaintiff, in waiving damages for
delay (final Paragraph Finding 23, R. 1916) and damages
for fraud. That was done to insure recovery, under the

me

. equitable rules governing assumpsit, of bare reasonable
value of work done (without recovery of other losses
. Sustained). Petitioner was denied all. Phillips’ conduct
was rewarded on appeal, by grant of more rights than any
contract ever.reserved. Different facts and a different
action were assumed, for Phillips. Duress findings were
plainly ignored. Any reference thereto rendered reversal
impossible. Opinion (2) (R. 1989) says: “In the view we
take of this case, it is unnecessary to discuss the findings
* * * that appellant was guilty of fraud in inducing
the execution and .performance of the contract.” What
else is established by the record, answer and Findings?

STATEMENT OF THE BASIS OF JURISDICTION.

(a). U.S. C., Title 28, §§347 (a) and 377, and Rule
' 38 of this Court, are the basis of jurisdiction.

(b) . The questions of. substance and of public con-
cern which are of special importance in the public in-
terests are stated in the ‘Reasons Relied On For Allow-

. ance of the Writ,” p. 18 herein. These cases sustain
_ jurisdiction:
Layne & Bowler Co: v. Western Well Works,
261 U. S. 387, 392, 67 L. Ed. 712.
. Magnum Import Co..v. Coty, 262'U..S. 159,’ 163,
67 L. Ed. 922.

(c) The decision on appeal contravenes Rule 52 (a),
Federal Rules of Civil Procedure, and U. S. C., Title 28,
§§773 and 875, and these cases, which sustain jurisdic-

‘ tion:
State Farm Mutual Auto Ins. Co. v. Cotighran,
- 303 U..S. 485, 487, 82.L. Ed. 970, 972, subd. 1.
Deputy v. DuPont, 308 U. S. 488, 497; 84 L. Ed.
416, 423, subd. 6.
Law v. U. S., 266 U. S. 494, 496, 69 L. Ed. 401, 402.

The error. of the decision in failing to declare and apply
the controlling state law and in denying equal protection
of laws (see infra p. 22) is shown by these’ decisions
which also sustain jurisdiction:

_ Griffin v. McCoach, 313 U. S. 498, 85 L. Ed. 1481.

en

12

Klaxon v. Stentor Elect. Mfg. Co., 313 U. S. 487,
85 L. Ed. 1477, 1480.

Fidelity Union Trust Co. v. Field, 311 U. S. 169,
85 L. Ed. 109.

Pecheur Lozenge Co. v. Nat. Candy Co., 315 U. S.
666, 86 L. Ed. (adv.) 739.

(d) The substantive rights denied by refusal to apply
the equitable rules governing an assumpsit action con-
travene:

Guerini Stone Co. v. P. J. Carlin Const. Co., 248
U. S. 334, 343, 63 L. Ed. 275, 284.

Stone v. White, 301 U. S. 532, 534, 81 L. Ed. 1265,
1267.

Phillips & Colby Const. Co. v. Seymour, 91 U. S.
646, 23 L. Ed. 341.

(e) The decision reversing the judgment of the Dis-
trict Court was filed August 19, 1942 (R. 1994). It
is reported, 130 F. 2d 499, and appears, R. 1987. Peti-
tion for Rehearing (R. 1995), filed September 2, 1942 (R.
2042), was overruled, without comment, on September 24,
1942 (R. 2043). Order staying mandate for thirty days
was filed October 2, 1942 (R. 2044).

QUESTIONS PRESENTED FOR DECISION.

1. Was it error to reverse a contractor’s judgment
of $140,582.53, entered as the value of concrete con-
struction work performed under compulsion, above the re-
quirements of a project falsely depicted and which in-
duced a “unit price” construction contract?

2. Are these rulings, made in support of reversal,
erroneous, to-wit:

(a) Under Missouri law it is not fraud, but only an
“expression of opinion or expectation,” before unit plans
are drawn, to supply a false ‘‘cross section’”’ and false en-
gineering information, through an authorized engineer
acting in the scope of his employment, to induce a “unit
price” construction contract?

(b) A “unit price” construction contract is not aban-
doned nor breached, nor is there any recourse, where the

13

contractor is required by compulsion to erect a project of
different nature, conditions and unit sizes from the rep-
resented project, and costing nearly $125,000 more
to build?

(c) A “unit price” contract made before unit plans
are drawn, for construction of approximately 12,000 cubic
yards of concrete, does not require certainty of engineer-
ing “‘job cost factors’’?

(d) If there was any original contract uncertainty,
it vanished seriatim, with the delivery of plans as issued
by the owner, where no independent Engineer was des-
ignated to draw them. The owner had the right to sup-
ply plans, with 215 changes made after the first issue of
500 plans, for a project contrary to prior, definite represen-
tations of the nature, conditions and unit sizes of con-
struction, and a judgment allowing the exact difference
in value is ‘not justified’? and must be reversed?

(e) The printed contract of Phillips Petroleum Com-
pany, providing that it shall not be liable for “any quanti-
ties expressly stated or implied by any of its representa-
tives” (R. 7, Par. 8), released all liability for the reason-
able value of all construction work performed under
compulsion, in excess of the requirements of a “unit price”
contract induced by false engineering information and a
“cross section,” supplied (before unit plans were drawn)
by Phillips’ Engineer, acting in the scope of his employ-
ment (Answer, Par. 12, R. 63). Although delivered in
Missouri by agreement (Finding 13, R. 1909), it should
be enforced by reversal, with no mention of the Missouri
public policy which condemns such contracts?

(f) Mutuality of obligation inheres in a “unit price”
contract specifying that the owner may terminate it and
all liability thereunder, at will, by paying the value of
completed work in place, but without paying for uncom-
pleted work, or for the cost of moving men, materials and
equipment in, and then out again, upon such termination?

(g) Performance, under compulsion, of an entirely
different and more costly project than that originally
represented to induce a “unit price” contract is per-
formance of the contract and supplies any original want
of mutuality, if it was lacking at its inception?

3. If error, are such determinations in the public in-
terests; was Phillips Petroleum Company thereby granted

14

the fruits of authorized fraud and deceit; do they en-
danger the Construction Industry and tend to delay con-
struction vital to the public interests in the present emer-
gency, and are the high principles of the United States
Courts truly reflected in the public interests and in the
interests of the Judiciary?

(a) Is it in the public interests that District Courts
of the Eighth Circuit, in following the decision, will be
bound to (1) grant the fruits of fraud to those who so
induce “unit price” construction contracts (2) follow the
rule of Roosevelt v. Mo. State Life Ins. Co., in fraud cases
governed by Missouri law (3) enforce contracts relieving
in advance from all liability for authorized fraud and (4)
rule that it is not fraud, but merely an expression of opin-
ion or expectation, to wilfully misrepresent unit sizes and
“job cost factors” to induce construction contracts?

4. Did the decision err and does it conflict with rul-
ings of this Court, in failing to consider or to determine
whether there was any substantial evidence to support
trial Findings?

(a) Did it err in ignoring supported trial Findings,
without consideration of, or comment thereon?

(b) Did it err in either respect, or deny equal pro-
tection of laws, when the same Court, at the same Term,
declared for other litigants, that trial Findings are pre-
sumptively correct and, if supported by substantial evi-
dence, will bind determination on appeal?

(c) Did it err in a diversity of citizenship case, in
failing to declare or apply the controlling law, or did it
avoid that error by ignoring the basis of jurisdiction and
ignoring that the contract enforced by reversal was for
Texas work but was delivered by agreement in Missouri
and was induced by deceit accomplished in Oklahoma and
Texas?

(d) Did it err in failing to apply the controlling
declared Missouri law on fraud and in citing and follow-
ing the former Circuit rule declared before Erie R. R. V.
Tompkins, when the same Court, at the same Term, de-
clored for other litigants, that the former Circuit doctrine
of Roosevelt v. Mo. State Life Ins. Co. may no longer be
assumed to apply in any case governed by the Missouri
law on fraud? (Page 23 herein.)

15

(e) Was equal protection of laws thereby denied?

(f) Did it err in failing to follow the Missouri law
declared in the first Missouri case cited in the opinion
(R. 1993), when Phillips’ own evidence indisputably es-
tablished that every claim in suit was left open, without
prejudice, until reviewed at a meeting held seventeen
days after the last check was accepted. and that by agree-
ment the checks were delivered in Missouri? (Page 9
herein. )

(g) Did it err in the same conclusions, when Par-
agraph 35 (R. 15) of the “contract” which Phillips pleaded
as a defense, specified that all payments, except the final
payment, are only “estimated to be due” and that the
final payment will be due not earlier than 30 days after
completion, and the last accepted check was received 11
days prior to the expiration of that time?

(h) Was there error in the same rulings, when the
questions were never in issue below, and “accounts
stated,” “release,” “compromise” or “‘accord and satisfac-
tion’? were not pleaded by answer?

5. The decision (R. 1992) reversed $35,597.16, al-
lowed “For loss of (concrete) forms, form panels and re-
use, totalling 355,971.64 (square) feet, at 10c per foot,
per Finding 22” (R. 1911), with the statement that the
allowance was “not justified by anything in the conduct
of the parties or in the words of their agreement” to pay
ten cents per foot under Paragraph 4 of memorandum of
June 17 (R. 18) “For changes in forms caused by a change
in the plans.” Supported Findings 22 (R. 1911); No. 31
(R. 1920); No. 20 and No. 21 (R. 1921); and No. 17 (R.
1908), and denial of requested Conclusions of Law (R.
1931) established these facts:

(a) The agreement was invalid for fraud and du-
ress. The allowance was made as reasonable value under
implied contract. The trial court, under the law of the
forum, found also that the language was ambiguous and,
after hearing the evidence of the parties who made it, ar-
rived at the identical results. whether the agreement was
valid or invalid (Finding 22). The above Findings es-
tablished:

(b) 15.4c per square foot “contact area” was speci-
‘ied in the April “contract” (R. 14) but that sum was

16

paid only for the exact area of concrete forms which
touched and held erected concrete. Contract, Paragraph
5 (R. 6), provides for changes in plans, but requires
agreement for the price and extent of work caused there-
by. Nothing whatever was paid for concrete forms built
ready for use, nor for the form panels which were used
at Phillips’ direction and which were fabricated to be used
on one structure, shown by issued plans, and were de-
signed to be successively moved and re-used to pour
the concrete for similar structures, likewise shown by is-
sued plans. The area of concrete forms and panels, men-
tioned above, was completely lost for any use after the
expense of building or fabricating was incurred, because
of the 215 changes made in the plans by Phillips, after
their delivery, with orders to erect.

(c) Phillips paid nothing whatever for the $35,-
597.16 loss resulting from the useless fabrication of costly
panels nor for erecting unused concrete forms. $1,165.67
was included in its judgment consent, for a few items,
based on memory alone. Plaintiff’s proof was by actual
field records. Phillips’ Engineers were ordered to keep
such records. None were produced. Phillips took ad-
vantage of the lower rate for forms wrecked by its trucks,
etc., although Finding 22 states that Phillips’ own evi-
dence indicated that it should pay 15.4c for many items
(Finding 22, R. 1911; No. 31, R. 1920; No. 17, R. 1909;
No. 1, R. 1898; Ex. 5, R. 295; Phillips’ Ex., R. 1380,
1381; Phillips’ Evidence, R. 1658-9).

Phillips’ letters (R. 1381, 1382) referred to therein con-
firm Finding 22 (R. 1911). The exact amount computed in
these letters is included in the judgment consent. Finding
1 (R. 1898). After trial, Phillips re-confirmed the admis-
sions made by its request for Conclusion VIII (R. 1932).
These facts were clearly presented (R. 2002) without re-
sult. Was the reversal error?

6. Was. it error to overrule petition for rehearing,
without comment and without correction, when (R. 2009)
attention was clearly invited that even under the errone-
ous ruling here made, Finding 22 established that Exhibit
5 (R. 295) was correct and on the face of that exhibit
petitioner was entitled to a minimum of $5,341.95 not paid
for concrete forms erected ready for use, but which could
not be used because of changed plans?

17

7. Was an aggregate of $4,775.34 properly reversed
without any comment or reference thereto, where trial
Findings established that the allowance was for overtime
specially ordered, without necessity and for the conven-
ience of defendant, with knowledge of the added costs,
and for items of additional work, all outside of the terms
of any express contract? (R. 2001.)

8. Was it error to rule:

(a) That fraud was known early in the work from
discovery of a difference in ratio of hand to machine ex-
cavation?

(b) That a “supplemental agreement” ‘“substan-
tially increased the contractor’s compensation” after dis-
covery of fraud and effected a waiver of fraud, or com-
promise thereof?

when the decision ignored trial Findings, which estab-
lished that differences between the work and “cross sec-
tion” representations were not discoverable until comple-
tion, and that there was nothing in the entire evidence
on which to predicate a waiver, ratification or estoppel
of plaintiff, or to deny “* the reasonable value of addi-
tional work performed nder compulsion. Defendant’s
Conclusions requested in an assumpsit case, to declare
the alleged ‘“‘supplemental agreement” valid and that it
was not obtained by fraud, were denied. Findings de-
termined facts which establish that the “agreement” was
invalid for both fraud and duress. Compromise was not
pleaded nor in issue below. The trial Court conducted
its own examination to determine that the “hand exca-
vating” was performed at Phillips’ request on oral agree-
ment to pay the additional cost for locating concealed
pipes to avoid damage by excavating machinery. The al-
leged ‘‘supplemental agreement”’ confirmed the prior, oral
agreement but after compulsion was exerted the same
work was thereafter required without compensation? (See
Page 7 herein.)

9. Was it error to reverse a composite quantum
meruit case and an action for damages for fraud and
deceit; for breach and for abandonment, when only sim-
ple assumpsit issues were pleaded and tried? (Page 7
herein.) :

18

REASONS RELIED ON FOR. ALLOWANCE
_OF THE WRIT.

I,

The decision on appeal fundamentally erred in basic
questions of substance and of special importance in the
permanent public interests and in the public interests
particularly affected in the present emergency.

The opinion contravenes good morals, public policy
and Engineering ethics. It rewards the authorized de-
ceit of Phillips Petroleum Company, but denies the simple
arithmetic and common sense clearly demonstrated in trial
Findings.

_ The errors gravely affect. the Construction Industry
and the Engineering Profession. Every concept of “unit
price” construction contracts is nullified. That important
type of engineering contract is designed to avoid delay to
wait for detailed plans.

. The Construction. Industry is endangered by the ap-
proval of fraud, where it may readily be perpetrated, as
the facts here illustrate. The Engineering Profession is
bewildered by the decision.

The District Courts of the Eighth Circuit are obliged
to grant others the fruits of deceit in inducing “unit
price” construction contracts.

The decision erred in ignoring lawful trial Findings
and in refusing to apply the controlling Missouri law and
the same law declared at the same Term, to govern other
litigants. Justice and equal protection of laws was there-
by denied, contrary to the accepted course of judicial pro-
ceedings and to the law repeatedly declared here.

There s a firm faith in this Court to decide the ques-
tions and to correct the basic errors made on appeal or,
otherwise, the now vital Construction Industry would be
paralyzed and an unfavorable reflection of the United
States Courts would follow, contrary to the public inter-
ests and the interests of the Judicial System.

19

A.
Basic Errors on Appeal.

The fundamental errors on appeal are of the gravest
concern in the Construction Industry. They astound the
Engineering Profession. By analogy, the ethics and
arithmetic taught on appeal is: An owner may induce a
unit price of $100 for erection of one 10 yard cube of con-
crete. It may, at the same price, thereafter require the
contractor to dig the holes and pour the same amount of
concrete to form the base of 300 separate highway mar-
kers. Under the supported Findings of Fact in the record,
the decision on appeal determines:

1. There is no fraud in inducing a “unit
price” construction contract, by knowingly supplying
false information and a false engineering ‘“‘cross-sec-
tion,” before plans are drawn. Such deceitful repre-
sentations “if made and if false” are mere ‘“expres-
sions oi opinion or expectation.” Opinion (2) (R.
1989). Likewise, it is immaterial that the owner
alone knew the true facts and could change the plans
at will, where no independent Engineer or Architect
was employed. Answer, Par. 12, R. 63, admits: that
everything given, was with authority, but it was ‘“‘not
accurate and not intended to be accurate.”

2. “Unit price” construction contracts require no
certainty of ‘‘job cost factors.” Any original uncer-
tainty is removed seriatim, as plans are received
during progress of the work. The plans may depict
a project of any nature, conditions or unit sizes, re-

8Cf. Picard v. United Aircraft Co., 128 F. 2d 1. c. 641, saying
“it is intolerable that the public interests should be at the mercy
of the haphazard scientific information of judges.” After stating
a difficulty to understand, United Const. Co. v. City of St. Louis,
(Mo.) 69 S. W. 2d 647, subd. 9, says:

“The contract deals with an engineering proposition,
abounds in technical and scientific terms, and was to be
carried out by men learned in that line of work. An expert
in that line of work was best fitted to interpret the contract
and solve the controversies. * * *”

That “human society is not so organized that a dispute be-
tween A and B can be of no concern to anybody else” is stated
in Note 7, 1. c. 295, in Aero Spark Plug Co. v. B. G. Corporation,
130 F. 2d 290, 295.

RAPALA MNT ETE NEA EAA ALAIN SANE RS OPIN Oe Mad oe ce AO

20

gardless of prior representations. Opinion (1) (R.
1988).

3. Contracting in advance against all liability
for authorized fraud is valid and properly enforced by
reversal on appeal, without mention nor application of
the governing Missouri public policy, which condemns
such contract provisions. Opinion (2) (R. 1990).

4. There is mutuality in a “unit price” construc-
tion contract which may be terminated at will by the
owner, upon paying the value of work completed ac-
cording to specifications and in place, but without
paying anything for moving in men, materials, ma-
chinery, sheds, field offices, shops, etc., and then mov-
ing them out again. Partially completed construction
need not be paid for. Moreover, want of original
mutuality is removed by building, under compulsion,
an entirely different project, costing nearly $125,000
more (excluding overtime and undisputed items).
That is performance, to make the contract binding,
if it was wanting in mutuality or was too indefinite
to be enforceable at its inception. Opinion (1) (R.
1989).

5. A “unit price’ contract is not breached nor
abandoned, nor is there any recourse for the con-
- tractor, who is required, under compulsion, to build a
project of different nature, conditions and unit sizes
and costing nearly $125,000 more than the originally
depicted project (excluding overtime and undisputed
items). Opinion (3) (R. 1991).
6. An aggregate of $4,775.34, allowed by trial
Findings for overtime and additional work, required
under compulsion and outside of any possible contract

terms, may be reversed on appeal, without mention.
Findings 23, 28, 29 (R. 1919; Rehearing, 2001).

The only interpretation of this decision in Engineer-
ing and Construction fields is that the United States
Courts refuse to recognize as fraud the intentional, au-
thorized misrepresentation of “job cost factors,” where
falsely made to induce “unit price’ contracts. The in-
evitable disruption, with extensive litigation necessarily
following, is disturbing in this vital Industry. That re-
flection of United States Courts is not in the public in-
terests.

21

The generality of statement and failure to declare the
law guiding the decision on appeal, may only be inter-
preted to mean that the doctrine erroneously announced,
is of universal application throughout the United States
and in every state. The importance of the rules of
Klaxon v. Stentor and Griffin v. McCoach, etc. (cited
but ignored on appeal, R. 1999), is here made manifest.

B.

The Engineering Purpose and Design of “Unit Price” Type
of Contracts and Their Vital Importance Now.

The reversal destroys and denies realization of the
basic engineering design of “unit price” contracts. That
is the type reviewed. The type enforced defies descrip-
tion. The opinion (R. 1992) says that the right to change
plans was reserved, but it says nothing of the coordinate
provision (R. 6, Par. 5) requiring advance agreement on
the price and extent of work so caused.

“Unit price” construction contracts (now, especially)
are an important general engineering type, designed to
avoid construction delay to wait for detailed plans. The
extent Or total amount of any classification of work, or
of the whole project. may legitimately he changed, within
reasonable limits. However, the conditions, nature and
unit sizes of a project, as represented to the contractor,
are the onlv “cost factors” available to compute “unit
nvices,”” particularly, where unit plans are not complete.
Those represented “cost factors” may not be altered at
will by the owner (as was done here). without a breach
or an abandonment of a “unit orice” contract. if it is
possible to conceive an original ‘meeting of minds’ there-
on, or if fraud did not vitiate it. In this respect, this
type closely resembles a “lump sum” contract.

Judicial consideration of the lawful Findings of an
engineering-exnerienced trial court. would have made the
errors impossible. The Findings demonstrate, by simple
arithmetic, that the plans issued during construction, for
10,735 of an approximated total of 12.000 cubic yards of
concrete, required a project of materiallv different nature,
conditions and unit sizes from those falsely represented
to induce the April “contract.”’ Because of those vital
differences, the record and Findings establish that plain-
tiff actually verformed over 9,485 separate work onera-
tions and additional work valued at $88,481.50. Exhibit

aie as toto

22

46, R. 1467, details the totals of $124,093.84, for additional
labor and material and itemizes each class of work and
the entire project (excluding overtime and admitted
items). Plaintiff was paid the exact sum it would have
received without that expenditure, if Phillips brought the
false program into reality.

The ratio of 10,735:12,000, for completed to approxi-
mated work, approaches a reasonable change in the total
extent or amount of the construction. No damages for
breach or abandonment therefor were claimed. The opin-
ion, however, reverses such an action. No distinction was
found between a change in extent of construction and
changes made in the nature, conditions and unit sizes
of the project despite the definite Findings which made
that so very obvious.

The decision acts as a “stop order” for all projects
if misrepresentation appears, no matter how vital they
may be. Continuing the work, or any adjustment, de-
spite or to endure duress, or an agreement to accept
pay for hand trenching ordered to protect pipes from

excavating machinery, effects a waiver or compromise,
under the teachings here. That result also follows ac-
ceptance of money indisputably due, to pay lienable bills
therefrom at Phillips’ request, with a concurrent agree-
ment that the controverted claims (later sued for) will
remain open, until a subsequent conference. Such is an
accord, if no satisfaction, but requires reversal, if this
decision rightly rules.

ioe

The Denial of Equal Protection of Laws and Other
Errors on Appeal.

The denial of equal justice and equal protection of
laws destroys a private interest, but that is of public con-
cern. Implicit public faith in equality of justice without
denial (inadvertently or otherwise) is essential for orderly
government. Petitioner filed its complaint, firm in that
faith. Indisputable rights, existing even under the errors
made, were denied, without comment, on prayer for re-
hearing (R. 1998-2001).

23

The same Court, however, at the same Term, declared
and applied for other litigants:

1. That trial findings are presumptively correct, and,
if supported by substantial evidence, bind the determina-
tion on appeal. American Insurance Co. v. Scheufler, 129
F. 2d 143. Chicago Mill & Lumber Co. v. Tully, 130 F.
2d 268, 274, 275.

2. Roosevelt v. Mo. State Life Ins. Co. is the first
case cited in Opinion (2), R. 1990, in support of its fraud
conclusions. With the same presiding Judge as here, it
was declared in Dubinsky v. Lortz, 129 F. 2d 669, 673,
that the Roosevelt case Circuit fraud doctrine may not
be assumed to apply in fraud cases governed by Missouri
law.

The governing Missouri “waiver of fraud’ rule was
printed at length, in Petition for Rehearing (R. 2074),
from a case cited in, but misapplied by, the opinion. The
governing rule of fraud was also printed (R. 2025). That
case is not cited in the opinion and the contrary state-
ment at R. 2027 is error. The Missouri law was ignored.

The opinion (1) (R. 1988) errs in presuming that a
Petroleum Company “can do no wrong.” History denies
that. United States v. McMullen, cited in support, is the
only mentioned construction case, where an independent
‘architect or engineer was not designated to prepare the
plans. The presumptions attending Sovereignty or
Government Departmental Engineers are an incongruity
here.’ Correction of specific fact errors, directly contrary
to the record (R. 2030, 2037, 2039), were denied. The
many anomalies are inconsistent with the accepted course
of iudicial proceedings. The existence of the power of
review vested in this Court usually suffices to render its
frequent exercise unnecessary. It failed here.

The decision and opinion erred in each and every
respect stated, and erred (a) in failing to declare and
apply the controlling state law in a diversity of citizen-
ship case; (b) in failing to adjudicate the only questions
presented, to-wit: are the trial Findings supported by sub-
stantial evidence and do they sustain the judgment (c)

8Cf. Secs. 216-218; 340-341. Engr. & Arch. Juris., J. C. Wait,
M.C.E. Cornell; LL.B. Harvard, 1st Ed.; 17 C. J. S. 772, N. 51, 55;
9 C. J. 695, N. 32; 697, N. 64, 68, 69.

24

in ignoring Findings entirely, (d) in contravening the
controlling law in each and every ruling made and by the
determination (e) in reversing a composite damage action
for fraud and deceit, breach and abandonment, when only
simple assumpsit issues were presented by the record and
(f) in reversing Finding 22 under the facts specified in
questions presented, No. 5. ©

Prayer for Writ.

Your petitioner prays that a Writ of Certiorari is-
sue under seal of this Court, directed to the United States
Circuit Court of Appeals for the Eighth Circuit, command-
ing that Court to certify and send to this Court a full
and complete transcript of the record and of the proceed- ’
ings in the case of Phillips Petroleum Company, a Cor-
poration, Appellant, v. Rau Construction Company, a Cor-
poration, Appellee, No. 12138, to the end that this
cause may be reviewed and determined by this Court as
provided for by law; and that the findings and decision of
said Circuit Court, to which petitioner has objected, be
reversed by this Court, and for such further relief as to
this Honorable Court may seem proper.

Rau Construction Company,
a corporation,

Petitioner,

By Maurice J. O’SULLIVAN,
700 Gloyd Building,
Kansas City, Missouri,

Attorney for Petitioner.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA34086415_1314%3A1. Public record. Not legal advice.