Fidelity & Deposit Co. v. Robertson , 136 Ala. 379 ( 1902 )

SHAP-PE, J.

Adams, Wright & Gossett contracted in writing with plaintiff to build for the latter according to certain specifications a, dwelling house, to furnish material therefor, to finish the work and deliver the building on or before the first of September, 1897, for which they were to be paid |3,450.20 in installments as the work progressed on certificates of the architect, fifteen per cent, thereof to be reserved until the completion and delivery of the building free from liens chargeable to the1, contractors. In the contract it Avas stipulated that “the old house on the lot shall become the property of the contractor and materials that are passed upon by the architects and accepted may be used in the neAV building;” also that “should the*OAvner at any time during the progress of the Avork require any alterations of, deviations from, additions to, or omissions in the said contract, he shall have the right and power to make such change or changes, and the same shall in no way injuriously affect or make void the contract, but the difference shall be added to or deducted from the amount of the contract as the case may be, by a fair and reasonable valuation;” also that “should the contractors at any time during the progress refuse to supply a sufficiency of workmen or materials, or cause any unreasonable delay or suspension of the work, or fail or refuse to comply with any of the articles of agreement, the owner or his agent shall have the right and power to enter upon and take possession of the premises, and provide materials and workmen sufficient to finish the work, after giving three days notice in writing directed, and delivered to the party of the second part; and the expense of finishing the various works shall 'be deducted from the amount of the contract.” By another clause the contractors agreed that in the event of their failure “to deliver the works completed on the date above mentioned”, they would forfeit to plaintiff five dollars for each day thereafter that the same remained unfinished, such forfeitures “to be deducted from the amount to be paid under this contract.”

After the execution of this contract Adams, Wright & Gossett as principals together with this defendant as surety executed a bond conditioned for the compliance by the contractors “with all the terms, covenants and conditions” of the building contract which contract is expressly referred to as forming part of the bond, and the latter contains certain provisions looking to the. protection of defendant as a surety, one of which is “that said surety shall be notified in writing of any act on the. part of the said principals or their agent or employes which may involve a loss for which the said surety is responsible hereunder, immediately after the occurrence of such act shall have come to the knowledge of the duly authorized representative or representatives of said W. T. Kobertson who shall have sunervisi'on of the completion of said contract,” etc. Another proviso of the bond was “that if the said principals shall fail to comply with all the conditions of said contract to such an extent that the same shall be forfeited, then said surety shall have the right and privilege to assume said contract, and to sub-let, or complete same whichever said surety may elect to do, provided it is done in accordance with said contract.”

On the 7th of July, 1897, after Adams, Wright & Gos-sett had partly built the house, using therein mainly new material, but some timbers of the old house, plaintiff. served them with the following notice: “T. J. Adams, W. C. Wright, A. J. Gossett, Adams, Wright & Gossett, Sir: Notice is hereby given you that yon have breached the contract entered into with the undersigned' in this: 1st, Yon have failed or refused to provide all manner of material and labor, etc. needful for the due performance of the several works incident to building my house as provided in 4th paragraph of contract of April 26th, 1897. 2nd, That you have refused to supply sufficiency of workmen and material and caused an unusual delay or suspension of the work, or failed or refused to comply with said articles of agreement of April 26th, 1897, as provided by section 6, and other provisions in contract of said date. Now in compliance with said stipulations, I notify you that said contract is forfeited, and I shall exercise my rights in the premises as I may see proper. W. T. Robertson.”

About t’li e time of this notice plaintiff notified the defendant that the contractors had failed to comply with their contract, and defendant declined to undertake the completion of the work, whereupon plaintiff employed Smith & Graves to complete the building according to the original plans except that two rooms were added extra. These last contractors under their contract with the plaintiff received and used in the building certain new material which had been provided therefor by Adams, Wright & Gossett and under the same contract the remaining timbers of the old house went into their possession and were used partly in completing the house and partly in structures of their own. The building in question was not finished until several months after the time fixed therefor by the contract with Adams, Wright & Gossett. The defendant is here sued alone as an obli-gor on tlie bond whereby it guaranteed the performance by Adams, Wright & Gossett of their contract.

The demurrer to count 3 of the complaint ivas properly overruled. That count set out in full the bond sued on including the building contract, and avers the latter ivas in specified particulars, unperformed, that the damages ela.ipied resulted, and that settlement thereof was¡ demanded of defendant and refused. These averments pointed with sufíicient definiteness to a breach of the bond and contained the essentials of a cause of action.

The court’s action in sustaining demurrers to pleas was free from error. The provision of the building contract referred to in plea 4 Avhieh authorized the temporary reseiwation from payments of 15 per cent, of estimated earnings, Ave construe as being solely for the plaintiff’s benefit, and consequently as one Avhieh he, in the absence of any prohibition in the bond, ivas privileged to waive Avithout prejudice to his rights against the defendant.

If after the execution of the bond additions to the building Averé agreed upon and made as averred in plea 9, that fact may have importance as tending to show a Avaiver by plaintiff of the stipulation as to time for completion of the house Cornish v. Suydam, 99 Ala. 620) ; but it is not inconsistent with his right to insist on the performance of others. The original contract having expressly provided for making, “alterations of, deviations from, additions to or omissions in said contract” without avoidance of the same and upon the basis of a corresponding change in the original contract price, it does not folloiv that the facts averred in either plea 9 or plea 10 had effect to release the defendant from its undertaking.

Pleas 12, 14, 15 and 16 as first filed Avere merely to the purpose of showing there had been an adjudication of the plaintiff’s present claim under a plea setting up a counter-claim by him in a suit on the original contract brought against him by Adams. Wright & Gossett. Neither of these pleas shows that defendant was a party to that suit, or that it stands here as the representative of Adams, Wright & Gossett in respect to the matters there determined; hence it does not appear that the judgment in that suit is binding on the parties in this. A judgment to conclude either party as to the matter thereof must be such as to work a mutual estoppel, hence a plea of res adjudicate to be good must show the parties litigant in the two suits are the same. — Allison v. Little, 85 Ala. 512, s. c. 93 Ala. 150; Galbreath v. Jones, 66 Ala. 129; Bargin v. Raplee, 100 Ala. 433. Rut under the principle last stated the demurrer to the second replication to plea 11, and the; demurrers to the replications to pleas 3, 5, 7 and 8, respectively, should have been sustained. Those replications set up in substance that the judgment in the suit of Adams, Wright & Gossett against the plaintiff was rendered in the latter’s favor, and this fact is so pleaded and relied on as exonerating the plaintiff from breaches on his part of the original contract. As to that matter, the former judgment, lacking identity of parties with those in the present suit, does not of itself preclude this defendant from maintaining at its first opportunity, that the non-performance of the original contract was attributable to the fault of plaintiff and not of Adams, Wright & Gossett.

The demurrers to replications pleaded to amended pleas 12, 14, 15, and 16, respectively, should also have been sustained. Those pleas as amended each presented substantially the same matter for defense, viz., that in the suit referred to of Adams, Wright & Gossett against this plaintiff the latter was by the verdict and judgment allowed the benefit of a counter-claim then interposed for the identical damages here sued for' whereby the same was paid or extinguished by or at the expense of the principals in this bond. The sufficiency of these pleas is not here in question. They are neither denied nor avoided by anything contained in the replications. The averments of the replications to effect that this plaintiff’s plea of recoupment filed in his suit with Adams, Wright & Gossett was directed only to special counts of the complaint which were not submitted to the jury must be taken as mere conclusions which are controlled and rendered nugatory by the plea itself which is set out and referred to in these pleadings and where-from it appears that the plea of recoupment was applicable to all the counts of that complaint. The replications do not show that the plea of recoupment ivas withdrawn or disallowed in the former suit, nor do they negative that there was a finding in favor of this plaintiff on that plea to the extent of allowing in extinguishment of the claims of Adams, Wright & Gossett, the whole of the damages here claimed against their sureties.

To plea 2 there were two replications and likewise to plea 11 there were two replications. There is a demurrer “to the replication to plea 2” and another “to the replication filed to plea 11”; but both these demurrers are ineffective because they fail to specify the particular replication to which they are respectively directed. Like indefiniteness vitiates the motion to strike parts of those replications. The elimination of the replications we have pronounced insufficient will dispense with the rejoinders, therefore assignments of error relating to rejoinders need not be further noticed.

Many questions here raised as to matters of evidence and instructions to the jury may be left unanswered, since on another trial they will probably assume new forms or be obviated under altered issues. The controversy so far as it pertains specially to the old house can be properly disposed of by treating the value of the part of the old timbers used by the contractors, respectively, as money paid them in consideration of their respective undertakings.

On the proof in this record damages for delay in building, if the plaintiff should be found entitled to recover such damages, should be estimated according to the loss actually sustained on that account by the fault of Adams, Wright & Gossett rather than by the stipulation in their contract on that subject. Apparently that stipulation was intended to he effective only in the event of those contractors continuing in tire work under the contract beyond the time it fixed for their delivery of the house. The plaintiff having before that time, declared the contract forfeited and treated it so by ousting Adams, Wright & Gossett from its further performance cannot maintain that the contract was thereafter continuing so as to bind them to such further performance. As bearing on this question though not strictly in point see Lennon v. Smith, 124 N. Y. 578.

The word “immediately,” as used in the above quoted clause of the bond which required notice to defendant of acts involving its liability, should be construed as meaning within a reasonable time; and the question of what is a reasonable time is ordinarily for the jury, and they should determine the question in view of the attendant circumstances in evidence. — Fidelity & Deposit Co. of Maryland v. Courtney, U. S. Sup. Ct. Oct. Term 1902, Pamph, Ed. No. 16, p. 838.

For the errors pointed out the judgment will he reversed and the cause remanded.