City of Chicago v. McKechney (205 Ill. 372, 1903)

Mr. Justice Magruder

delivered the following opinion:

The contractors, Weir, McKechney & Co., began work under the contract of October 19, 1895, in December of that year. They first sank a shaft at Keith street, northwest of the south-east end of section 3. Their next work was to sink a shaft at Potomac avenue north-west from the Keith street shaft. After sinking these shafts they began to excavate for the tunnel both ways from the two shafts. They continued the work until August 1, 1896, and then stopped work. From the time they began their work in December, 1895, until they ceased working in July, 1896, the city paid them $39,574.81. These payments were made in various sums, all the payments except the first two being made at the rate of two per month upon certified estimates, signed by the proper city officials. Upon these estimates are endorsed written receipts for the amounts so paid to them, signed by Weir, McKechney & Co., amounting altogether to the total sum above named.

When the contractors, Weir, McKechney & Co., ceased work on August 1, 1896, they at once began a suit against the city. This suit grew out of differences of opinion between the city and the contractors as to the proper construction of certain provisions of the contract of October 19, 1895. This suit was begun in the circuit court of Cook county, and resulted in a judgment in favor of the plaintiffs therein on September 14, 1896. An appeal was taken from such judgment to the Appellate Court, and on December 31,1896, the Appellate Court entered a judgment. (Weir v. City of Chicago, 67 Ill. App. 247). An appeal was taken from the judgment of the Appellate Court to this court, and the decision of this court, embodied in an opinion'filed on March 12, 1897, is reported as City of Chicago v. Weir, 165 Ill. 582. During the pendency of this litigation from August, 1896, to the final termination thereof on March 12, 1897, very little work was done by the contractors in the construction of the tunnel; but they resumed work on November 14, 1896, in view of a threat by the commissioner of public works to cancel the contract,, and, during this period, six payments were made to them, two in December, 1896, three in February, 1897, and one on March 1, 1897, amounting altogether to $12,591.40. Substantially all of the payments thus made to the contractors during the period between August, 1896, and March, 1897, were receipted for under protest.

Work was resumed in March, 1897, and between March 20,1897, and December 1, 1897, and including those dates, the city paid to the contractors, Weir, McKechney & Co., the sum of §283,094.86 upon certified estimates. The said sum of §283,094.86 was paid out to Weir, McKechney & Co. in various amounts, the payments being made twice in each month during that period; and sometimes three payments were made in one month. Upon the certified estimates are endorsed written receipts, signed by Weir, McKechney & Co., for the amounts of such payments.

At this point, and on December 8,1897, the contractors began this present suit against the city. Before proceeding to state the substance of the pleadings in the present action, it may be remarked that the contractors proceeded with the work of construction, and the city continued to make payments to the contractors, such payments being for the most part semi-monthly payments, until about the 21st of April, 1898, when the contractors again abandoned their work upon the tunnel. They did not resume work until about July 11,1898, at the time of the proceedings by the common council of Chicago, set forth in the statement preceding this opinion. About July 11, 1898, work was again resumed and continued with more or less regularity until November 11, 1898, when the contractors abandoned the work altogether, and never have since resumed it. The work of constructing" the tunnel was unfinished on November 11, 1898, when the contractors finally abandoned it. Between the time when this suit was begun, and November 11, 1898, when the work was finally abandoned, the city paid to the contractors various sums of money, amounting altogether to the sum of §283,455.59. The payments, constituting this total amount, were made between December 16, 1897, and November 1, 1898, including those dates, upon certified estimates, and for the most part at the rate of two payments in each month. These payments were duly receipted for without protest by the contractors, in writing, endorsed upon the estimates. The total amount paid to the contractors by the city between December 31,1895, about the time when the construction of the tunnel began, and November 11, 1898, ,when the same was abandoned, was the sum of $618,-716.66. This sum, and the judgment rendered in this case for $555,560.22, amount to $1,174,276.88.

Besides the suit begun in August, 1896, and the present suit begun on December 8, 1897, the contractors during the progress of the work brought at least three injunction suits against the city. The first injunction suit was brought by them against the city in March, 1898. In the beginning of that month the city engineer gave-the contractors a written direction to raise the grade in certain drifts, and, although the specifications provided that the tunnel should be built on such grades as should be determined by the city engineer, they refused to obey the order, and procured an injunction from the Superior Court of Cook county restraining the city from enforcing the order. This injunction was subsequently dissolved. The second injunction suit, brought by the contractors against the city, was commenced on April 30, 1898. At that time the city engineer wrote a letter to the contractors, ordering them to brick up certain portions of the excavation in certain drifts of the tunnel, there being danger at those points that the tunnel would cave in. This order was not complied with, but the contractors obtained an injunction against the city from interfering with the work. This injunction was in force when the Council proceedings of July 11, 1898, were had. At the time of the last suspension of the work on or about November 11,1898, the contractors filed a third bill for an injunction against the city. By this third bill they sought to prevent the city, through an injunction, from seizing the tunnel and machinery and forfeiting the contract. This last injunction was finally dissolved on June 16, 1899, one week before the beginning of the trial of this case; and on June 23, 1899, the day on which the trial began, the commissioner of public works served upon the contractors the notice of forfeiture of the contract of October 19, 1895, as the same is set forth in the statement preceding this opinion.

First—The pleadings. In order to understand the present case, and the various points involved in the record, ■it will be necessary to state somewhat in full the very extraordinary condition of the pleadings in the case.

When the suit was brought on December 8, 1897, the ad damnum was laid at $68,000.00. On January 7, 1898, a declaration was filed. On March 5, 1898, a demurrer was filed to this declaration, and, after argument, was overruled, and the plaintiffs were given leave to increase the ad damnum to $125,000.00. On November 28,1898, the plaintiffs were granted leave to amend their declaration instanter by increasing the ad damnum to the sum of $650,000.00, and to file their bill of particulars instanter, which they did. The sum total of the bill of particulars, so filed on November 28, 1898, is $620,833.18. On November 30, 1898, it appearing that the declaration, which had been filed on January 7,1898, had been lost, the court granted leave to the plaintiffs to file an amended declaration, which was substituted for the former declaration and filed on November 30, 1898. The declaration of November 30, 1898, consisted of five-counts and the common counts. The first count alleged that the defendant was indebted to the plaintiffs in the sum of $650,000.00 for work and materials furnished for the construction of the tunnel, known as section 3 of the north-west land tunnel. The second count was substantially the same as the first. The third count alleged that, on October 19, 1895, an agreement was made between the plaintiffs and the city, that the former should build the water tunnel according to the terms, conditions and specifications set forth in said contract, and that the defendant should direct the construction thereof, and alleged that said contract of October 19, 1895, was afterwards, on May 17, 1897, and on October 8, 1898, amended, modified and changed by agreement, and that defendant was to pay plaintiffs according to a schedule of prices set forth in'said contract and the modifications thereof, the payments to be made from time to time as the work progressed; that the city promised to fulfill said contract and the modifications thereof, but that the city refused to pay plaintiffs for their work and materials furnished in the construction of the tunnel. The fourth count also declared upon the contract of October 19, 1895, and the alleged modifications made therein by the contracts of May 17, 1897, and October 8, 1898, and alleged that the defendant promised to fulfill said contract and the modifications thereof, but that defendant did not direct plaintiffs to construct the tunnel at the grade, or on the line, prescribed by said contracts, but required and compelled them to construct the tunnel at a different grade and in a different direction from the grade and. direction provided for in and by said contracts, whereby the cost of the work was greatly and unnecessarily and unreasonably increased, and plaintiffs were compelled to expend large sums of money, to-wit, the sum of $3000.00 as compensation for injuries to the property of third persons. The fifth count also declared specially upon the contract of October 19, 1895, and the alleged supplemental contracts or modifications of May 17, 1897, and October 8, 1898, and avers that defendant did not perform said contract in that it did not properly direct the construction of the tunnel, but gave plaintiffs unreasonable, erroneous, incorrect and contradictory directions in regard to the same, whereby the cost was unreasonably and unnecessarily increased. Demurrers filed by the city to these five counts were overruled as to the first and second and common counts, and sustained as to the third, fourth and fifth counts.

On March 11,1898, appellant had filed to the original declaration of January 7, 1898, which was subsequently lost, four pleas, including the general issue sworn to, and a plea of set-off, with a copy of account and bill of particulars accompanying the same. These pleas were lost, together with the declaration, and, by stipulation between the parties,- copies of such pleas so filed on March 11,1898, were re-filed in said cause as substitutes for, and in place of, said original pleas and of said original bill of particulars and copy of account. The second plea so filed by the city on March 11, 1898, and a copy of which was subsequently re-filed as a substitute for .the lost original thereof, averred that the contract of October 19, 1895, together with the specifications attached thereto, was executed by the plaintiffs and the city; and further averred that no other or different contract, agreement, undertaking or promise than as contained in said contract of October 19,1895, with the specifications attached, was ever made by the city with the plaintiffs, or either of them, qnd that the promises set forth in the several counts of the declaration were those contained in said contract of October 19,1895, and not otherwise, and that at the several times so named the defendant had not, by its city council or otherwise, made any appropriation of moneys for the payment of the several sums so promised to be paid, etc.

The third plea, so filed by the city, alleged that, at the time of the making of said contract of October 19, 1895, and of the promises alleged in the declaration, the city was indebted, in the .aggregate, exceeding five per centum on the value of the taxable property therein, and within its limits, as ascertained by the last assessment for State and county taxes, etc. The fourth plea was a plea of set-off, alleging that plaintiffs were indebted to the city in the sum of §540,000.00 for money before that time lent, paid, laid out and expended, etc., and also for moneys before that time unlawfully paid to the plaintiffs by the agents and officials of the defendant, and without any authority from the defendant, and for over-payments of moneys of the city unlawfully before that time made to the plaintiffs at their request by the‘agents and officials of the city and without authority, and also for moneys before that time due to the city from the plaintiffs by reason of the delays of the plaintiffs in doing the work provided to be done by them in and by said contract of October 19,1895, which sums of money, so due from the plaintiffs to the city, were alleged to exceed the damages sustained by the plaintiffs, etc.

The copy of the account or bill of particulars, attached to said fourth plea, or plea of set-off, set forth alleged unlawful and over-payments to said firm of Weir, McKechney & Co. for alleg'ed and pretended rock excavation in tunnel, part earth and part rock, and in all earth, at $6.00 per cubic yard, said payments amounting to $101,836.74, and having been made at various dates and in various sums between March 23,1897, and November 1, 1897, inclusive of both of said dates. Said bill of particulars or copy of account also set forth alleged unlawful payments to said firm for back masonry at $10.00 per cubic yard, amounting altogether to $102,959.00, and having been made at various dates and in various sums between June 3, 1897, and November 1, 1898, including both of those dates. Each over-payment for such excavation and back masonry is referred to in said bill of particulars as being contained in the various estimates made by the city and shown by the record. Other items are set forth in said bill of particulars, amounting altogether to $195,841.18, being for alleged unlawful payments for back masonry at $10.00 per cubic yard; and for timber unnecessarily used in certain drifts and one ‘of the shafts of the tunnel at $10.00 per thousand feet, amounting altogether to $21,145.81; and also certain payments alleged to have been made to employes of said firm, and for pumping and maintenance and out of the reserve of fifteen per cent, etc., amounting altogether to $64,002.51; and also certain other alleged unlawful payrn.en.ts on account of rock excavation and amounts due as liquidated and fixed sums for delay in completion of section 3 of the tunnel under the contract at $200.00 per day, amounting altogether to $110,692.86. The total items of set-off shown by the bill of particulars, attached to the plea of set-off, filed as a substitute for the plea of March 11, 1898, amount to $400,636.92. The first of the four pleas above named was the plea of general issue, and attached to the same was an affidavit of the corporation counsel of the city, that the said plea and all the statements therein were true in substance and in fact.

On December 2, 1898, the plaintiffs below were given leave to file an additional count to their amended and supplied declaration, which had been £Lled on November 30,1898. Accordingly, on December 2,1898, the plaintiffs below filed the first additional count to their declaration. This count set forth in hcec verba the contract of October 19,1895, together with all the specifications thereto attached; also the alleged contract of May 17, 1897, unsigned by the city, and the contract of October 8, 1898, all of which are set forth in the statement preceding this opinion. After setting forth the instruments last above referred to, the first additional count alleges that, in consideration thereof, and of the promises of the plaintiffs to construct said tunnel, the city promised the plaintiffs to perform said three contracts, but avers that the city has not done so, but refuses to pay plaintiffs for their work and materials, done and furnished in the construction of the said tunnel, to the damage of the plaintiffs of $650,000.00, for wages, materials, machinery and other disbursements, etc. Said first additional count also alleges, that the city did not direct plaintiffs to construct the tunnel at the grade or on the line described in the contract of October 19,1895, but directed and compelled plaintiffs to construct said tunnel at a different grade, to-wit, at a grade higher than that provided for in the contract, and in a different direction from that provided for in the contract, whereby the cost of the work was greatly increased, etc.; and it also alleged in said count that the city did not properly direct the construction of the tunnel, as required by the contract of October 19, 1895, but gave plaintiffs unreasonable and erroneous directions in regard to the same, etc. The city demurred to the first additional count, so filed on December 2, 1898; and this demurrer was sustained. Thereupon, plaintiffs were given leave to file two additional counts to the declaration, known as the second additional count and the third additional count, which were so filed on December 21, 1898.

The second additional count averred the execution of the agreement of October 19,1895, referring to the same as set out in full in the first additional count above referred to, and further averred that plaintiffs performed work upon the tunnel pursuant to the same under the direction of the commissioner of public works of the city, and to his satisfaction and approval; that, according to a prevailing custom, the city should have made estimates, every two weeks, of the amount of work done by the plaintiffs according to the prices fixed by the contract; that, by said contract, it was agreed that, if the rate of progress should be satisfactory to said commissioner, estimates in the usual form would be issued to the contractors, during the construction, for eighty-five per cent of the value of the work done and in place at the time of issuing the same, the remaining fifteen per cent being reserved until the final completion of the work; that plaintiffs did the work, and the rate of progress was at all times satisfactory to the commissioner, but the defendant did not and would not estimate every two weeks in the usual form for eighty-five per cent of the value of the work done, and did not and would not pay to plaintiffs eighty-five per cent of such value; that there was due to the plaintiffs prior to May 17, 1897, a large sum of money, to-wit, $300,000.00, which the city refused to pay to them. The second additional count then proceeds to aver that a further contract was made on May 17, 1897, as set forth in the first additional count; that plaintiffs proceeded with the work in accordance with the terms of" said contract of October 19, 1895, as modified by the contract of May 17, 1897, and that, after the making of the latter contract, estimates for the work done should have been made every two weeks in accordance with said contract and the custom aforesaid; that plaintiffs were entitled to receive payment for said work in accordance with the terms of the original contract of October 19, 1895, as modified and supplemented by the contract of May 17, 1897; that the city did not pay the plaintiffs eighty-five per cent of the value of the work, and would not allow and pay to plaintiffs for the materials encountered, that should be classified as rock, at the rate fixed in the contract of May 17, 1897, and would not allow plaintiffs for the extra masonry placed between the upper quarters outside the regular specified rings of brick work of the tunnel and the crown bars or planks to protect the work, as provided in the contract of May 17,1897; that there was due to plaintiffs, prior to July 11, 1898, under said two contracts, large sums of money, to wit, $300,000.00, which the city refused and still refuses to pay; that, prior to July 11,1898, certain differences arose between plaintiffs and the city, and on or about June 28,1898, plaintiffs addressed to the mayor of the city a proposition, dated June 28, 1898, which is set forth in the statement preceding this opinion', and which said" second additional count also set forth in liceo verba. The second additional count further avers that, on or about July 11, 1898, the city council adopted a certain resolution, which is set forth in liceo verba in the count, and a copy of which is also set forth in the statement preceding this opinion. The second additional count then avers that such resolution was approved by the mayor, and that, in accordance with said proposition of plaintiffs, and said resolution, plaintiffs proceeded with the construction of the tunnel, and on October 8, 1898, there was executed by the plaintiffs and the city a contract dated October 8, 1898, which is set forth in the statement preceding this opinion, and which is referred to in the count as being set out in said first additional count; that, after July 11, 1898, and after the execution of the contract of October 8, 1898, plaintiffs proceeded to carry on the work, called for by the original contract, and by the supplemental contract of May 17, 1897, in accordance with the terms thereof, and in pursuance of the arrangements made by the letter of the plaintiffs to the mayor and said resolution of July 11,1898, and under the terms of the contract of October 8, 1898; that it was the duty of the commissioner of public works to issue estimates twice each month for work done, and to pay on such estimates the cost of the expense of such work, and to allow, in addition to the lineal foot price where the tunnel was in earth, $6.00 per cubic yard for rock and for all material, which should be classified as rock, and where the tunnel was in earth, or partly in earth and partly in rock, it became the duty of the city to allow plaintiffs $10.00 per cubic yard for the extra masonry, directed to be placed between the upper quarters outside the regular specified rings of brick work of the tunnel and the crown bars or planks to protect the work; that plaintiffs laid out large sums of money for material and labor, and the city would not issue estimates to them, nor pay on said estimates the costs and expenses incurred by them, and did not allow to said plaintiffs, in addition to the lineal foot price, the $6.00 per cubic .yard, and the $10.00 per cubic yard, above mentioned; that after July 11, 1898, large sums' of money became due to plaintiffs for rock, and material classified as rock, excavated, and for extra masonry placed as above specified, to-wit, the sum of $300,000.00, which the city refuses to pay plaintiffs to their damage of $650,000.00,

The third additional count, so filed on December 21, 1898, makes substantially the same averments as the second additional count, and sets forth, and refers to, the same instruments in writing and alleged contracts. The third additional count avers that said contract of October 8, 1898, upon its execution, immediately became a part of the agreement between the plaintiffs and the defendant for the construction of said tunnel; that the city promised to give plaintiffs proper and reasonable directions for the construction thereof, on a line within the area shown as colored on a certain map made by the officers of the city and attached to the original contract, and at such a grade that the depth of the center line of said tunnel should be approximately between seventy-five and eighty-five feet below Chicago city datum, the plaintiffs being required by said contract to obey such directions; that the city also promised that it would issue estimates twice every month .for eighty-five per cent of the value of the work done as above stated, and would pay such estimates upon their presentation to the comptroller, and would allow to plaintiffs for timbers and boards, used in supporting the soil in the excavation, and left permanently in the work, at the rate of $10.00 per thousand feet board measure, and would allow plaintiffs for excavation, etc., at the rate of $6.00 per cubic yard as above stated, and also $10.00 per cubic yard for extra masonry as above stated; that plaintiffs have in all things performed said three contracts, yet the city did not give them reasonable directions, but gave them unreasonable and contradictory directions, whereby the cost of the work was unnecessarily and unreasonably increased, to-wit, in the sum of $300,000.00, without any corresponding increase in the compensation of plaintiffs therefor; that the city did not direct the tunnel to be run at the grade, or on the line, required by the contracts, but required plaintiffs to construct the same on a line outside the area above mentioned,'and with a g'rade much higher than that described in the contracts, to-wit, at a grade of but sixty-five feet below Chicago city datum, whereby the cost of the work was greatly increased in the sum above named, and whereby plaintiffs expended large sums of money, as compensation for injuries to the property of third persons, caused by constructing the tunnel at such changed grade; that the city did not issue estimates twice every month for eighty-five per cent of the value as above specified, and did not pay plaintiffs the cost of the expense of the work, and did not allow them the $6.00 per cubic yard for excavation and $10.00 per cubic yard for extra masonry as above set forth, and did not allow them $10.00 per thousand feet board measure for the timbers used in supporting the soil, and left permanently in the work; that, in carrying on the work, the plaintiffs paid out large amounts of money, to-wit, $500, - 000.00, for material and labor; that there is now due to them from the city, under the contract of October 19, 1895, and the confirmatory contracts of May 17,1897, and October 8, 1898, a large sum of money for work done, etc., to-wit, $650,000.00, which the city refuses to pay. Demurrer was filed by the city to the second and third additional counts of the amended declaration, and was overruled.

On March 10,1899, the death of Frederick C. Weir was suggested, as above stated, and the cause proceeded at the suit of the present appellees.

On April 1, 1899, the city filed four pleas to the second and third additional counts of the plaintiffs as above set forth. The first of these pleas was the general issue, sworn to. The second plea alleged the execution of the contract of October 19, 1895, and averred that it constituted the only promise and undertaking of the city, as charged in the declaration, and that no other or different contract, agreement, undertaking or promise than as contained in said contract of October 19, 1895, in writing, with said specifications attached, was ever made by the city with the plaintiffs or any or either of them, and that all the promises set forth in the several counts of the declaration of the plaintiffs are those contained in said contract of October 19, 1895, and not otherwise. This plea also sets up that the city council did not make any appropriation of moneys for the payment of the sums so promised to be paid as aforesaid. The third plea is the same as the third plea already set forth, alleging that, at the time of the execution of the contract of October 19, 1895, the city -was indebted in the aggregate exceeding five per cent of the value of the taxable property, etc. The fourth plea was a plea of set-off, alleging the indebtedness of the plaintiffs to the city in the sum of $540,000.00, and alleging over-payments by the city to the plaintiffs, unlawfully made, as alleged in the plea of set-off already described. On April 7, 1899, the plaintiffs filed a similiter to the plea of the general issue, and demurred to the second, third, and fourth pleas, filed by' the city.

Subsequently, on May 25,1899, the plaintiffs filed two replications to the second plea of the city. The first replication, in reply to the statement that the city h^d not made, any appropriation, etc., set up the proceedings in the suit begun in August, 1896, and the judgments therein by the trial court, the Appellate Court and the Supreme Court as res judicata. The second replication sets up that the city of its own wrong broke the promises in the declaration mentioned. The plaintiffs also filed two replications to the third plea. In the first replication, as to the statement that the city was indebted in the aggregate exceeding five per cent, the proceedings and judgments in the suit begun in August, 1896, are pleaded as res judicata. The second replication to the third plea merely avers that the city of its own wrong, etc., broke the promises in the declaration and each count thereof mentioned. On June 23, 1899, the city filed a rejoinder to the first replication to the second plea, which was in-effect, a plea of nul tiel record, as to the judgments mentioned in the plea. The city also filed a rejoinder to the first replication to the third plea, which was also in substance a plea of nul tiel record. The city also filed a second rejoinder to the first replication to the second plea, setting up that the contract referred to in the suit begun in August, 1896, was not the same contract as that upon which the present suit is brought, but was another and different contract. The second rejoinder filed by the city to the first replication of plaintiffs to the third plea is substantially the same as the second rejoinder to the first replication to the second plea.

On May 26, 1899, the cause was set down for trial for Monday, June 19,1899. Subsequently, the city asked and obtained leave to withdraw its third plea, filed on April 1, 1899.

On June 23, 1899, the trial of the cause commenced, and the jury was empaneled.

On July 3, 1899, during the trial and on the eleventh day after the trial had begun, an order was entered, on the motion of the attorneys of the plaintiffs, permitting all papers and proceeding's to be amended by increasing the ad damnum to $1,000,000.00, and, on like motion, the plaintiffs were given leave to file additional counts instanter, and to file an additional bill of particulars instanter; and it was ordered that said additional counts and additional bill of particulars be filed nunc pro tunc as of June 23, 1899. Accordingly, two additional counts, known as the fourth and fifth additional counts, were filed to the plaintiffs’ declaration on July 3, 1899, nunc pro tunc as of June 23,1899, entitled in the cause of John McKechney and John McKechney, Jr., as surviving partners of Frederick C. Weir, John McKechney and John McKechney, Jr., against the city of Chicago. At the same time, to-wit: July 3, 1899, the plaintiffs were permitted to file nunc pro tunc as of June 23, 1899, an additional bill of particulars, the sum total of items therein being $830,340.29. Subsequently on July 8,1899, plaintiffs were permitted to file an additional bill of particulars, the items in which amounted altogether to $19,118.95, and subsequently on July 13, 1899, plaintiffs were permitted to file another bill of particulars amounting to $63,155.05, including the $19,118.95, already mentioned.

The fourth additional count filed by the plaintiffs on July 3, 1899, nunc pro tunc as of June 23, 1899, sets up the execution of the contract of October 19, 1895, the beginning of the work thereunder under the direction of the commissioner of public works of the city, etc., and avers that such work was done to the entire satisfaction of said commissioner, and, after setting up the provisions of the contract as to estimates, and the alleged custom as to the giving of stóch estimates every month, and the alleged execution of the contract of May 17, 1897, and after setting forth said letter of June 28, 1898, to the mayor, and the resolution of the city council passed on July 11, 1898, and after further setting up the making of the alleged contract of October 8, 1898, and the making of the promises by the city to give plaintiffs proper directions for the construction of the tunnel on a certain line within the area shown on a certain map made by officers of the city, and at such a grade that the depth of the center line of said tunnel should be. approximately between seventy-five and eighty-five feet below Chicago city datum, and to issue estimates to the plaintiffs twice every month for eighty-five per cent of the value of the work, and to pay such estimates' upon presentation to the city comptroller, and to allow plaintiffs for the timbers and boards used/as above stated at the rate of $10.00 per thousand feet; and after further setting up the alleged promises of the city to allow plaintiffs for all materials encountered in earth tunnel that was rock, or of such a nature as to be classified as rock, at the rate of $6.00 per cubic yard, in addition to the lineal foot provided for by said original contract; and after further setting up that, by the contract of October 8, 1898, and said resolution, the city agreed to allow the plaintiffs, where the tunnel was in earth or partly in earth and partly in rock, $10.00 per cubic yard for all extra masonry directed to be placed between th,e upper quarters outside of the regular specified rings of brick work of the tunnel, and the crown bars or planks to protect the work; and after further alleging that plaintiffs always performed said three contracts on their part, the count then charges that the city did not give the plaintiffs proper or reasonable directions for the construction of the tunnel, but gave unreasonable, erroneous, incorrect and contradictory directions whereby the cost of the work was greatly increased, to-wit, in the sum of $300,000.00, without any corresponding increase in plaintiff’s compensation therefor; that defendant did not direct the tunnel to be run at the grade or on the line required by said contract, but required it to be constructed on a different line and with a- higher grade, to-wit, at a grade of but sixty-five feet below Chicago city datum, whereby the cost was greatly increased, to-wit, in the sum of $500,000.00, etc.; and it is therein further alleged that defendant did not issue estimates twice every month for eighty-five per cent of the value, etc., and did not allow the price of $6.00 per cubic yard for excavation, and $10.00 per cubic yard for back masonry, as above alleged, and did not allow $10.00 per thousand feet board measure for timbers and boards used as aforesaid; and it is charged that plaintiffs laid out large amounts of money, to-wit, $500,000.00, for material and labor.

The fourth additional count, after making the averments above stated, which are substantially the same as those made in the second and third additional counts, then proceeds to make additional allegations not contained in any previous count, and constituting new issues, not theretofore formed or made in the case. The additional allegations, thus incorporated into the decíaration by the fourth additional count during the trial of the cause, and after more than half of the time of such trial had passed, were substantially as follows: that the city issued to the plaintiffs certain pretended estimates, which were incorrect and purported to certify the value of the work at amounts less than the actual value of the work done and* materials furnished. The fourth additional count then proceeds to aver as follows: “That the said mistaken and erroneous estimates, so furnished and issued by the said city, were so issued by the mistake and fraud and fraudulent purposes and acts of the officers of said city, and for the fraudulent and wrongful purpose of depriving plaintiffs of the compensation to which they were justly entitled under the said contract and supplemental contract, and proposition and resolution, and for the purpose, of making the said contracts and the rights and obligations of plaintiffs thereunder, as hereinbefore stated, so burdensome and unprofitable as, if possible, to induce and compel these plaintiffs to abandon the same.” It is further averred in said fourth additional count that the city sometimes required extra work to be done, and ordered work to be done, and materials to be furnished, which were in the nature of extra work, and sometimes gave written orders therefor, and sometimes required such extra work to be done without giving written orders therefor. The count then makes the following allegation: “That said original contract was so modified that the said supplemental agreement, proposition, resolution and stipulation were, by the mutual agreement and consent of the parties, substituted for and accepted and adopted as the written orders for extra work required by the provision in the original contract, requiring that ‘no payment will be made for any extra work not specified' in this contract, unless such extra work shall have been done by the written order of the commissioner of public works, to be attached to such contract, directing the same, and stating that such work is not included in the contract, what extras are, and that such extras are necessary to the proper completion or for the security of the work previously done, and the reasons therefor,’ and that said requirements of said original contract, in respect to written orders for extra work, were, by the mutual agreement of the parties, and by the acts of the parties, and by the acts of the defendant, in ordering and requiring such extra work to be done and issuing estimates therefor, and making payments therefor, waived and abandoned.” The count then further proceeds to allege “that after the making of said contract of October 19, 1895, to-wit, on the first day of December, 1895, the defendant waived the provision and requirement of said contract of October 19,1895, that the contractor must deliver to the commissioner of public works on or before the tenth day of each month, a written statement of amount of claims for extra work done and extra materials furnished during the previous month, or for extra expenses incurred from any cause whatever, otherwise claims for extras during the month would be forfeited and waived; and waived each and every part thereof; and that thereafter and after the tenth day of each month, to-wit, on the eleventh day of each month thereafter, thence hitherto, the defendant and the commissioner of public works accepted and received written statements of the amount of claims, and also oral statements of other claims for extra work done and extra materials furnished during the previous month, and for extra expenses incurred, with like effect as if such statements for each month were written statements and were delivered to the commissioner of public works on or before the tenth day of the succeeding month,” etc. The count then proceeds to set up the fact, that the city maintained water-works and a water system under the statutes of the State, and collected water rates or rents for water furnished by it, and kept the income therefrom in a separate fund known as the water fund; that the contracts for the 'construction of water tunnels have been silent since 1872 as to the fund from which payments therefor were to be made, and payments on such contracts have been made from said water fund, and, up to the time of making the tunnel contract herein, no express appropriation of money from said water fund was ever made to pay for the construction of any of the water tunnels which were a part of said water-works or system; that the moneys provided to be paid to plaintiffs by said original and supplemental contracts, proposition, resolution and stipulation were payable out of, and understood to be payable out of said water fund. The count further avers that the issue of said estimates and the making of said payments were necessary in order to enable plaintiffs to complete the work within the time contemplated by the contract; that the performance thereof was made a condition precedent to the performance by plaintiffs of the things on their part to be performed. The count then charges that the city withheld said estimates and payments and refused to make same, and made such fraudulent and false estimates as aforesaid for the purpose of making the performance of said contract, as so modified, so burdensome, injurious and disastrous to these plaintiffs as would make it impossible for these plaintiffs to perform the same and induce them to abandon the cbntract. The count then averred that plaintiffs have not abandoned the contract and are in possession of the work, and insist upon the performance of the contract by the city as modified; “that by reason of the said wrongful, fraudulent and mistaken acts and misconduct of the defendant, its officers and agents as aforesaid, these plaintiffs have been prevented from completing the performance of said work and finishing the said tunnel within the time contemplated by said contract, and the city of Chicago is solely responsible for the non-completion of said work;” that, by reason of said wrongful misconduct, the machinery of plaintiffs has been tied up, and they have been prevented from completing the work with the same, and entering upon other work, and have been deprived of the use of their plant in other work; that the city “in further pursuance of said wrongful and fraudulent purpose, has seized upon certain of said plants and machinery and taken and appropriated the same and carried off, and deprived the plaintiffs of the possession thereof, to the damage of the plaintiffs in the sum of, to-wit, $75,000.00.” The count further alleges that defendant did not and would not perform the said three contracts, “but on the contrary said defendant willfully, wrongfully, fraudulently, capriciously, arbitrarily, unreasonably and without any reason or cause, and contrary to the provisions of said contracts and each of them, on, to-wit, the 23d of June, A. D. 1899, at, to-wit, the county of Cook aforesaid, assumed to declare said contracts and each of them, rescinded and forfeited, and assumed to declare and did declare the rights of these plaintiffs under said contracts, and each of them, then and there terminated, and in a like manner assumed to and did notify plaintiffs that the said contracts were then and there ended, rescinded, forfeited, terminated and abandoned, and then and there abandoned and refused to perform said contracts and each of them,” etc.; that the city put an end to the further performance thereof by the plaintiffs and notified them to surrender possession of the work and the tunnel, attaching said notice of forfeiture to the count as “Exhibit A,” the said notice being the same as that which is set forth in full in the statement preceding this opinion. The count then averred that the city wrongfully seized and took possession of the machinery, plant, tools, fixtures, equipments and property of the plaintiffs used by them in carrying on said work, which were of great value, to-wit, of the value of $100,000.00; that plaintiffs were willing and offered to continue in the performance of the work, and to complete the same, and have ever since been willing to perform the same, but the city wrongfully, arbitrarily and without cause refused to permit plaintiffs to continue to perform the work and on June 23, 1899, prevented plaintiffs from proceeding to complete the work, and hindered and prevented them from so doing, “whereby the said plaintiffs have lost and have been deprived of the earnings, considerations and moneys which would have accrued to and become due unto these plaintiffs from said defendant, by their further performance and completion of their said work, and their said agreements, and undertakings, and whereby the plaintiffs have lost and have been deprived of the profits and advantages, which they otherwise would have derived and acquired from the completion of said work and performance of said contracts and the promises on their part to be performed, which earnings, considerations, moneys, profits and advantages then and there amounted to a large sum of money, to-wit, $650,000.00.” The count further avers that, by reason of the wrongful repudiation of said contracts by the city and its wrongful acts in assuming to forfeit the same and in discharging the plaintiffs from further performance thereof and preventing them from further performing the same, and seizing said work, and depriving them of the possession thereof, the right of the said defendant to retain the remaining fifteen per cent of the amount earned and to be earned, was terminated; that the defendant still retains said fifteen per-cent, and that the same is due and payable unto plaintiffs, but defendants refuse to pay the same; that, by reason of the conduct of the city, said tools, plant, machinery, fixtures and equipment have become of no value to the plaintiffs and utterly lost to them, whereby they have -suffered damage in the sum of $250,000.00; and that there is due to them from the city on account of the non-performance of said contract a large sum of money, to-wit, $650,000.00, being the amount of damage by reason of the wrongful termination, abandonment and forfeiture of the contracts, and prevention of plaintiffs from completing the same, and by reason of the premises the city became indebted to the plaintiffs in the sum of $1,0Q0,000.00.

The fifth additional count to the declaration makes the same allegations as the fourth additional count, except that it goes into more detail, giving figures and amounts as set up in the itemized bill of particulars filed with the declaration. It sets up the same allegations in regard to the refusal to give estimates, to pay the amounts mentioned in the alleged supplemental contract, and also charges the giving of fraudulent and pretended estimates. It also sets up “that said original contract was so modified that said supplemental agreement, proposition, resolution and stipulation were by the mutual agreemént and consent of the parties substituted for and accepted and adopted as the written orders for extra work required by the provisions in the original contract,” as above set forth. It also alleges that said requirements of said original contract in respect to written orders for extra work were by the mutual agreement and by the acts of the parties, and by the acts of the defendant, etc., waived and abandoned. It contains the same allegations in regard to waiver of the provision as to the delivery to the commissioner of public works, on or before the tenth day of each month, of a written statement of amount of claims for extra work, as are contained in the fourth additional count. It also adds that the city refused to make said estimates and payments as aforesaid, but made such mistaken, improper, fraudulent and false estimates for the said fraudulent purpose of making the performance of said contract, as so modified, so.burdensome, injurious, unprofitable and disastrous to plaintiffs as would make it impossible for plaintiffs to perform the same and as would induce plaintiffs to abandon said contract. It further alleges “that by reason of the said wrongful, fraudulent and mistaken acts and misconduct of the defendant, plaintiffs have been prevented from completing the performance of said work and finishing said tunnel within the time contemplated by said contract,” and that “said city of Chicago, in pursuance of said wrongful and fraudulent purpose, has seized upon certain of said plants and machinery and taken and appropriated the same, and deprived the plaintiffs of the possession thereof,” etc. The fifth additional count charges,that, by reason of the alleged refusal of the city to be bound by the terms of said contracts, said tools, plant, machinery, fixtures and equipment have become of no value to the plaintiffs and utterly lost to them, whereby they have suffered damage in the sum of $250,-000.00; that the- city by its wrongful acts has further damag'ed plaintiffs and is indebted to plaintiffs in the further sum of $35,000.00 for the cost of maintenance, and in the further sum of $20,000.00 for interest upon the moneys of plaintiffs, invested in said plant, etc.; and in the further sum of $75,000.00, withheld by the city from the payments to be made to plaintiffs as the so-called fifteen per cent reservation; and in the further sum of $25,000.00 by depreciation in value of said plant, etc., caused by the wrongful acts of the city; and in the further sum of $100,000.00 for special damages to plaintiffs by preventing them from completing the work; and there is due to plaintiffs from the city a large sum of money, to-wit, $650,000.00, being the amount of damage by reason of the wrongful termination of said contracts and the prevention of plaintiffs from completing the same; and that the city is indebted to the plaintiffs in the sum of $1,000,000.00, etc.

On July 6, 1899, the city filed an amepded copy of account in support of their plea of set-off. The city also filed on July 6,1899, a plea of the general issue sworn to, and a further plea setting up the execution of the contract of October 19, 1895, and the specifications thereto attached, and alleging that said contract of October 19, 1895, constituted and was the only promise and undertaking of the city referred to and charged in said counts and each of them, and that no other or different contract, undertaking or promise than as contained in said instrument in writing dated October 19,1895, was ever made by the city, to or with the plaintiffs or any of them, etc.

Second—The effect of the new allegations made by the fourth and fifth additional counts to the declaration, and of the new issues formed by such allegations during the■ trial and at a time when the trial of the cause was approaching its close.

The original contract of October 19, 1895, which is admitted by both sides to have been executed and to be binding upon both parties, provides, among other things, that “no payment will be made for any extra work not specified in this contract, unless such extra work shall have been done by the written order of the commissioner of public works, to be attached to such contract, directing the same, and stating that such work is not included in the contract, what the extras are, and that such .extras are necessary for the proper completion of, or for the security of the work previously done, and the reasons therefor. ”

The additional counts, filed on July 3, 1899, after the trial of the cause had lasted some eleven days, averred, “that said original contract was so modified that said supplemental agreement, proposition,resolution and stipulation were, by the mutual agreement and consent of the parties, substituted for and accepted and adopted as the written orders for extra work required by the provisions in the original contract,” as above quoted.

The first instruction given for the plaintiffs upon the trial below was as follows:

“The jury are instructed that, if they believe from the evidence that plaintiffs performed'labor and furnished materials for the city of Chicago in the construction of section 3 of the north-west land tunnel in question'under and in accordance with the terms of a contract or contracts therefor between the plaintiffs and the defendant, as alleged in the declaration or any count thereof, and that the plaintiffs have not been paid therefor, then the plaintiffs are entitled to recover herein for the same at the price or prices fixed by such contract or contracts therefor.”

By this instruction the attention of the jury was called specifically to “the terms of a contract or contracts * * * as alleged in the declaration or any count thereof.” The fourth and fifth additional counts, filed in the midst of the trial, were as much a part of the declaration as any of the other counts thereof, and are included within the meaning of the expression “any count thereof.” Therefore, the minds of the jury were directed to the new contract set up in the new and additional counts. These counts alleged that there was an agreement between the parties, by the terms of which the supplemental agreement of May 17, 1897, and the proposition to the mayor of June 28, 1898, and the resolution of July 11, 1898, and the stipulation made on October 8,1898, were substituted for and accepted and adopted as the written orders for extra work, required by the original contract. There is no evidence whatever in the record, "so far as we have been able to discover, that any agreement was made between the city and the plaintiffs, by which the documents and instruments last referred to were to be regarded as substitutes for the written orders required by the contract of October 19, 1895. The first instruction given for the plaintiffs was broad enough in its terms to include cthis contract, and, as applicable to that contract, the instruction was erroneous because there was no evidence upon which to base it.. By the instruction the right of the plaintiffs to recover, was based upon the condition that they had performed labor and furnished materials in accordance with the terms of any contract mentioned in any count of the declaration. The contractors were not to be paid for extra work, except where it was done by the written order of the commissioner of public works. The first instruction told the jury that the parties had agreed to accept certain instruments in writing as substitutes for the written orders so required. There being no evidence to support the existence of any such contract as that, the instruction was wrong.

Again, the additional counts charge the city with making false and fraudulent estimates for the fraudulent purpose of depriving plaintiffs of the compensation, to which they were entitled, and for the purpose of making the contracts so burdensome and unprofitable to them as to compel them to abandon the work. So far as we have been able to discover, there was no proof whatever in the record to sustain this allegation of the additional counts. The notice of the forfeiture of the contract of October 19, 1895, attached as an exhibit to the fourth additional count, is alleged to have been served upon the plaintiffs as a part of the alleged fraudulent conduct of the city as thus specified. By the terms of the contract of October 19, 1895, it was provided that, if the rate, at which the work should be performed, should not, in the judgment of the commissioner of public works, be' such as to insure its progress and completion in the time and manner stipulated, or if the work should be wholly or in part improperly constructed, the commissioner of public works of the city had the right to declare the contract forfeited as to a portion or the whole of the work and to re-let the same. In pursuance of the power conferred by the original contract the notice of forfeiture was served, and yet the giving of that notice, and the action of the city taken under and in pursuance of it, are charged in the additional counts to be the culmination of a fraudulent scheme to compel the plaintiffs to abandon the work. The fifth instruction given for the plaintiffs begins as follows: “If the jury believe from the evidence that the defendant wrongfully seized and appropriated to its own use the plant or property of the plaintiffs, in manner and form as averred in the declaration or any count thereof, then the plaintiffs are entitled to recover,” etc. By this instruction the attention of the jury was directed to the additional counts, which charged the fraud therein alleged against the city. The right of the plaintiffs to recover was conditioned upon the finding of the jury that the city had seized the plant of the plaintiffs in pursuance of a fraudulent scheme to compel the plaintiffs to quit the work. As there was no evidence whatever of any such fraudulent scheme on the part of the city, this instruction clearly was not based upon the evidence.

Third—One of the principal questions in the case relates to the alleged contract of May 17, 1897. It is claimed by appellees that the contract was valid and a binding obligation upon the city. On the other hand, it is contended by the city that the contract was void and invalid, and that the city was not bound thereby, or by any of the actions of the parties taken thereunder.

The contract of May 17,1897, was signed by the members of the firm of Weir, McKechney & Go., the contractors, but was never signed by the city of Chicago, or by any of its officials. It was claimed by the contractors that, after making excavations for the purpose of constructing the tunnel in rock and in earth separately, they began to make their excavations through a new material, called by them- “conglomerate,” a substance claimed by them to be like neither rock nor earth, but classified as “material encountered in earth tunnel that is rock or of such a nature that it is classified as rock.” One of the witnesses defined “conglomerate” as “rock formed by the cementing together of gravel stones and boulders by argillaceous and silicious cement, making it rock; a homogeneous mass so that, when it breaks, it doesn’t sepárate the pebbles but breaks as one mass.” “Conglomerate” is defined as rock composed of particles of pre-existent rocks cemented together, so as to make a uniformly solid substance. (1 Century Diet, p.1191; Webster’s Int. Diet, title “Conglomerate;” Standard Diet, same title.) The contractors claimed that this conglomerate substance or material was not provided for in the original contract of October 19, 1895, and that, therefore, they were not obliged to make excavations through it at the prices fixed by the contract of October 19, 1895. Accordingly, as the testimony tends to show, some verbal arrangement was made with a former superintendent of public works of the city, named Downey, by which the contractors were to be allowed §6.00, instead of §2.00, per cubic yard for rock excavation, and §10.00 per cubic yard for back masonry, instead of nothing for such back masonry. The price, allowed by the contract of October 19, 1895, for rock excavation over and above cost of lineal foot of tunnel or shaft, was §2.00 per cubic yard, so that the allowance of §6.00 per cubic yard by the alleged contract of May 17, 1897, was an increase over the amount allowed by the former contract. As will appear hereafter, the contract of October 19, 1895, allowed nothing for back masonry, and the alleged contract of May 17, 1897, in providing for a payment to the contractors. of §10.00 per cubic yard for such back masonry, made a material change in the terms of the former contract in this respect. Some time in April, 1897, Downey went out of office, and a new superintendent of public works by the name of McGann was appointed by the mayor. The unsigned contract of May 17, 1897, was prepared by the contractors, or in their interest, as embodying the former verbal arrangement with superintendent, Downey. The contract of May 17, 1897, after being drafted and signed by Weir, McKechney & Co., was presented to superintendent McGann, but was never signed by any city official. McGann testifies that he never said that he would sign the contract of May 17, 1897, or execute it; that he never asked McKechney to sign it; that its terms were never agreed to or assented to by him.

The question then arises, whether this alleged contract of May 17, 1897, which was never signed by the city, or any of its officials, was a valid and binding contract, so far as the city was concerned. Undoubtedly, the city officials, after May 17, 1897, paid from time to time to the contractors for material encountered in earth tunnel that was rock, or of such a nature that it was classified as rock, at the rate of $6.00 per cubi