Charles v. E. F. Hallack Lumber & Manufacturing Co.

Mr. Justice Goddard

delivered the opinion of the court.

It appears from the certificate to the bill of exceptions that it does not contain all of the evidence introduced upon the trial of the cause, the original exhibits which include the plans and' specifications being omitted. These are made in express terms a part of the contract, and are therefore important and essential factors in determining the principal issue in the case. Without them before us we are unable to *289 determine whether the building was completed in conformity with them or not, or pass upon the sufficiency of the evidence to sustain the conclusions reached by the trial court, and must accept as conclusive its finding that Thompson & Tomlinson had substantially performed their contract, except in the particular mentioned.

It is insisted by plaintiff in error that this finding in itself, by reason of the exception, fails to bring the case within the most liberal rule of substantial performance, since it shows so material a deviation as to entitle Charles to the sum of $2,000 as damages on account thereof, and that the exception neutralizes the force of the finding as to the fact of substantial performance, and leaves the question open for this court to examine the contract in the light of the evidence, and determine whether the condition of the floors was in conformity with its stipulations and the plans and specifications ; but for the reason above stated we are precluded from this investigation, and can only look to the pleadings, and ascertain therefrom the theory upon which the case was tried, and determine whether, under all the provisions of the contract therein set forth, such finding can be upheld, and, if so, its sufficiency to support a recovery in this character of action. Upon an examination of the contract it will be seen that, while performance as to work and materials in conformity with its provisions is made a condition precedent to payment, it also provides that if the work or material are contrary to its requirements the architect shall have authority to remove the same and replace them by proper work and materials at the contractors’ cost. It also appears from the pleadings that although the issue of performance was tendered by the cross complaint of Thompson & Tomlinson, and the answer of Charles, that by way of counterclaim he sought to recoup damages on account of defective floors, and alleged as a ground for such damages that he was compelled “to wholly relay and cover with, new flooring.said building, and by reason of said acts mentioned of said defendants *290 Thompson & Tomlinson in respect to said flooring, he was damaged thereby in the sum and amount of $4,000 ; ” etc.

And he further avers that on or about the 5th day of May, 1890, Thompson & Tomlinson made and presented a statement and account of extra work and labor; and thereupon he made and presented to them a statement and account for labor and materials omitted, and also presented a claim fox-damages, by reason of bad floors, accruing up to that time; and that being unable to agx-ee, the respective claims and demands were .referred to L. Cutshaw, architect, for his examination and decision, both under the terms of said contract and by express agreemeixt of the several parties; and it was decided by said Cutshaw, among other things, “that fox-damages as aforesaid by reason of bad floors, there ought to be allowed the defendant the sum of $1,500 ; ” etc. In his prayer he asks, among other things, that axx accounting may be had as between him and Thompson & Tomlinson as to the sum, if any, due to them; and that upon such accounting he may be allowed and credited with his damages in said sum of $4,000, etc.; and that he may recoup the same against their claim under the contract, and that he may be permitted and directed to bring such sum as may be found due from him to said Thompson & Tomlinson into court, etc.

It would seem, therefore, that the finding was in accordance with the issues made by the pleadings, and a proper one in view of the theory upoix which the case was tried, and that the plaintiff in error is not now in a position to invoke the application of the rigid rule anixounced by some courts to the effect that when performance is stipulated for and made a condition precedent to the right of recovery, axxd the action is solely oix the contract, performance in every essential particular must be shown before a recovery can be had, or to insist that under the issues tendered by the pleadings in this case no excuse for íxonperformance can be shown, nor x-ecovery of the contract price (less damages on account of omissioxx) be had. Whether he xxxight, if he had elected so to do, have stood upon his technical rights under the contract, *291 and successfully resisted payment of the balance of the contract price until a strict performance of all the requirements of the contract was had and the certificate of the architect produced, as provided therein, it is unnecessary to determine, since he has elected to avail himself of his option under the contract to replace the defective flooring and repair the omissions of the contractors in respect thereto, and to submit his claim for the amount expended in the completion of their work as a set-off or counterclaim against the amount, if any, found due them under the contract. In support of his position he invokes the rule adopted in New York and some other states to the effect that a strict performance is necessary as a condition precedent to recovery on the contract. Among them, the case of Van Clief v. Van Vechten, 130 N. Y. 571 , is cited as being particularly in point upon the proposition that when a substantial sum is required to finish the work, a substantial performance has not been had. In that case the contractor was to furnish materials and erect a building for the net price of $4,023, payable in installments. Among such installments was the sum of $800, to be paid when the plastering was finished. He abandoned his contract, leaving the building uncompleted, and refused further performance. After such refusal the owner furnished materials and employed a workman to finish the building at an expense of $1,905.20, which included $200 for completing the plastering. The suit was brought by a subcontractor to obtain a lien against the building for materials furnished the contractor.

After referring with approval to the doctrine announced in former cases upon the subject of substantial performance, and expressly finding that the plastering was not substantially finished, and that the abandonment of the work was willful, and the omission to perform intentional, thé court say:

“ The owner, however, although under no obligation to do so, completed the building herself, according to the oontract, which thus continued operative through her action. After the contractor refused to proceed she performed the contract *292 for him, as it expressly permitted her to do. As her action was according to the contract, it will be presumed, under all the circumstances and in support of the judgment, that it was under the contract. ® * * Instead of pleading a cancellation or rescission in her answer, she asked to have the amount expended by her to complete the building 4 allowed as a set-off or counterclaim to any claim of the said defendant Smalle or the plaintiffs herein, or of any of the other defendants herein, in case the court should eventually determine that the said defendant Smalle is entitled to any sum whatsoever under the said contract.’ * * * The amount paid by her for this purpose, in legal effect, was paid for the original contractor. The difference between the sum thus expended and the aggregate amount unpaid on the contract with Smalle upon the completion of the entire work, became due under the contract. To the extent of that sum, being the difference between $2,023 and $1,905.20, the lien of the plaintiffs attached, and they are entitled to a foreclosure for that amount.”

Thus it appears that the damages allowed as a set-off are much larger in proportion to the contract price and the balance found due than the amount allowed in this case. This decision, by reason of the analogy between the facts and pleadings of that case and those of the case under considertion, clearly sustains the right to recover the balance due upon the contract, less the amount required to repair omissions and defects, under the issues joined. In the ease of Crouch v. Grutmann, 134 N. Y. 45 , the court say:

44 While the condition of the carpenter work when the Wadsworths left it in July, was such as to indicate defects and omissions, the correction of which would cost $656.29, it may be observed that such defects upon such estimate of the cost to the amount of $439.29 were remedied through the action of the defendant taken pursuant to his right reserved by the contract. * * * This work having been done by the defendant in the exercise, by his election, of such right, he cannot effectually assert forfeiture in respect *293 to the deficiency so supplied, hut the Wadsworths were entitled to the benefit of the work thus produced and were chargeable to the defendant for the amount of the expense incurred by him in doing it.”

See, also, Murphy v. Buckman, 66 N. Y. 297 .

That there may be a substantial performance, notwithstanding the amount required to remedy defects and omissions may be quite substantial, is shown in several New York cases. Among them, see Woodward v. Fuller, 80 N. Y. 312 ; Murphy v. Buckman, supra; Crouch v. Gutmann, supra; Phillip v. Gallant, 62 N. Y. 256 .

We conclude, therefore, that the amount of damages allowed is not necessarily inconsistent with the fact of substantial performance; and, it appearing both from the pleadings and proof that the plaintiff in error has relaid the defective flooring, he is not in a position to resist a recovery under the contract on the ground of nonperformance, or the nonproduction of the architect’s certificate.

Counsel for plaintiff in error discuss at some length the error predicated upon a preliminary ruling denying the motion to strike out so much of the second defense of Thompson & Tomlinson as attempted to set up an estoppel by reason of the failure of the architect to call their attention to the defective flooring and to object to the poor work as it was being done. If it be conceded that the court erred in its ruling upon this motion, the error was harmless, since the judge who tried the case was not, as counsel assume, controlled by that ruling in his final determination of the case, but allowed damages on account'of defective flooring.

The first and second assignments of error are based upon the admission in evidence of a stipulation signed by the contractors and the subcontractors, wherein the respective amounts due the subcontractors were agreed upon. This stipulation not only fixed the amounts due the respective subcontractors from the principal contractors, but further recited that they were entitled to liens on the building for these respective amounts.

*294 To the introduction of this stipulation the plaintiff in error objected on the ground that it was immaterial, irrelevant and improper. It was clearly admissible as evidence against Thompson & Tomlinson to fix the amount due from them to the subcontractors, and the amount of the personal judgments to be rendered against them. For this reason, therefore, the general objection to its admission was properly overruled. But, giving to the objection the force claimed, and conceding that it'presented the question of the admissibility of the stipulation as evidence for any purpose against Charles, we still think it was properly overruled. The right of the owner to have an adjudication of the amount due from the principal contractors to a subcontractor, before his property can be subjected to a lien therefor, is well settled, and hence the necessity of making the principal contractor a party to an action by the subcontractor against the owner, unless such adjudication has been already had. The purpose to be subserved by these requirements is that the owner, if compelled to satisfy a subcontractor’s claim to relieve his property from a lien, may be credited for the sum so paid as against the amount due the principal contractor; and when, either by the contract or a subsequent agreement between the contractor and a subcontractor, the price of material or labor furnished is fixed and liquidated, and the payment of such price by the owner would be binding against the principal contractor, there seems to be no good reason why such contract or agreement should not, at least prima facie, constitute evidence against the owner of. the value of such materials or labor. Phillips, in his work on Mechanics’ Liens (sec. 204), states the rule on this subject as follows:

“ The owner, when the contract is not made immediately by himself or his duly authorized' agent, but by his contractor, may show that the price agreed to be paid by the contractor was beyond the fair market value at the time; but, if there is no evidence to show that the materials furnished by a subcontractor are worth less than the price agreed on between him and the principal contractor, he is entitled to a lien for *295 this agreed price. The owner, when sued by a subcontractor, would be able to impeach the contract-only for fraud or mistake. The contract in either case is admissible in evidence.”

He cites in support of this proposition: Cattanach v. Inger soll, 1 Phila. 285 ; Hilliker v. Francisco, 65 Mo. 598 ; Miller v. Whitelaw, 28 Mo. App. 639 . To the same effect see, also, Deardorff v. Fverhartt, 74 Mo. 37 .

We think, therefore, that the stipulation was not only admissible as against Charles, but, in connection with all the testimony introduced, was sufficient to sustain the finding of the court as to the value of materials furnished by the company, and that they were used in the building.

It furthermore appearing that the claim of the companj'-, and the clains of all the subcontractors, in the aggregate, were less than the amount found due the principal contractors, the allowance of this claim could in no way prejudice the plaintiff in error.

Error is further assigned upon the action of the court below in denying damages on account of failure to complete the building in the time specified. If we were at liberty upon this record to examine the evidence introduced upon this subject, for the purpose of passing upon its sufficiency, we would be compelled to accept the finding of the court as conclusive, since the testimony as to the causes of the delay is conflicting, and there is much that tends to uphold the court’s conclusion that the delay was caused, in part at least, by the conduct of plaintiff in error, and that the requirement of the contract in this particular was waived by him.

It is further insisted that the court erred in its finding that Groth & Company were entitled to a lien against the premises and a personal judgment against Charles for the sum of $2,450, as principal contractor. The claim for extras was asserted by Groth & Company and denied by Charles. This controversy also necessarily involved an examination of the plans and specifications, and the conclusion of the court below therefore being based upon such examination,.in the *296 light of conflicting testimony, its finding is conclusive upon this review.

The thirty-fifth assignment of error is predicated upon the refusal of the court to permit counsel for plaintiff in error to examine a paper shown to the witness Thompson to refresh his memory while testifying. His attention had been called to a conversation had with Charles, and he was asked if he had at the time any figures from Charles as to the amount he thought was due. The witness was handed a paper from which to refresh his recollection. He then stated the amount. Counsel for plaintiff in error asked to see the paper, and was refused, the court remarking, “ It is received only as bearing upon the question of interest.” On cross-examination of the witness counsel did not renew his demand for an inspection of the paper.

Waiving the question whether the demand was made at the proper time, and conceding that the court erred in its refusal to allow counsel to examine the paper, it was nevertheless error without prejudice, since the testimony was received only as bearing upon the question of interest, and the court ultimately made no allowance of interest.

Without noticing in detail the errors assigned upon the admission or rejection of testimony, we think the action of the trial court in these particulars in no way prejudiced the rights of plaintiff in error, and upon a careful examination of the record we find no error that will justify a reversal. The judgment and decree of the district court are according]}'' affirmed.

Affirmed.