Adalex Const. Co. v. Atkins

• Citation: 106 So. 338,214 Ala. 53
• Decision Date: 19 November 1925
• Docket Number: 6 Div. 342
• Parties: ADALEX CONST. CO. v. ATKINS et al.
• Court: Supreme Court of Alabama

106 So. 338

214 Ala. 53

ADALEX CONST. CO. v. ATKINS et al.

6 Div. 342

Supreme Court of Alabama

November 19, 1925

Appeal from Circuit Court, jefferson County; William M. Walker Judge.

Bill of equity by Dan L. Carmichael against Sara C. Atkins, the Penn Mutual Life Insurance Company of Philadelphia, the Adalex Construction Company, and others and cross-bill by the Adalex Construction Company. From a decree for the cross-respondents Atkins and the life insurance company, cross-complainant appeals. Reversed and rendered.

James H. Willis, of Birmingham, for appellant.

Black &amp Harris and W.C. Woodall, all of Birmingham, for appellees.

BOULDIN J.

This suit involves the claim of a contractor for balance due for labor and materials furnished in the erection of a residence under written contract with the owner, and the enforcement of a mechanic's line therefor. The issues presented go to the question of indebtedness vel non. The register, on a reference, found for the contractor for the amount claimed. The trial court sustained exceptions to the report, and rendered a decree in favor of the owner.

The contract was as follows:

"This agreement made this 10th day of November, 1921, by and between Adalex Construction Company, hereinafter called the contractor, and Mrs. Sara C. Atkins, hereinafter called the owner witnesseth:

"That the contractor and the owner for the consideration hereinafter named agree as follows:

"Article 1. The contractor agrees to perform all the work shown on the drawings and described in the specifications, subject to changes shown in article 4 entitled: 'Specifications for residence for Mrs. O.D. Atkins (Cliff Road) Birmingham, Alabama,' prepared by Brooks B. Burnham, architect, and to do everything required by the general conditions of the contract, the specifications and the drawings.

"Article 2. The contractor agrees that the work under this contract shall be substantially completed by February 14, 1922.

"Article 3. The owner agrees to pay the contractor, on satisfactory completion of the work, a fixed fee of six hundred dollars ($600). It is understood that all material for the work is to be ordered in the owner's name and is to be paid for by the owner; pay rolls to be met weekly by the owner.

"Article 4. The contractor agrees that the entire cost of building (that is, material, labor, and the contractor's fixed fee of $600, exclusive of plumbing, heating, and electrical fixtures) will not exceed ten thousand dollars ($10,000), provided the owner co-operates with the contractor. (It is the opinion of the contractor that the cost will be approximately $9,000.)

"The contractor and the owner agree that the general conditions of the contract, the specifications and the drawings, together with this agreement, form the contract, and that they are as fully a part of the contract, as if hereto attached or herein repeated; and that the following is an exact enumeration of the specifications and drawings:

"Specifications--13 sheets.

"Drawings--8 sheets.

"Contract as here signed includes everything, but plumbing, heating, and electric fixtures."

Then follow alterations from plans and specifications, designed to reduce the cost, which need not here not be set out.

Without material controversy, the amount due the contractor, consisting of agreed price for tile roof furnished and laid at $525 and unpaid balance on the fixed fee of $600, aggregates $832.54, with interest from February 15, 1922, as found by the register.

The defense is by way of recoupment for breach of contract in two regards; (1) Beach of covenant or guaranty of maximum cost as stipulated in the contract above; (2) breach of contract for good workmanship, resulting in defects in the building to the damage of owner.

To the first alleged breach the contractor replies that the actual cost of the building as per contract did not exceed the amount stipulated; that the excess cost was due to alterations and additions made on orders of the owner, not covered by the guaranty; that the owner expressly waived the guaranty by directing changes and additions after warning that they would run above stipulated costs, and her agreeing to take the risk; that it was impliedly abandoned by such substantial changes and additions as to work a release of the obligation as to maximum cost.

To this the owner responds that the changes were made upon consultation and agreement that the changes would not add to the cost, or that compensating omissions would prevent the cost running above $10,000, and were made with the mutual assent that the guaranty of cost should remain in force, and that the changes did not fact in involve any such material additions to the cost as would avoid the guaranty in the contract.

To the charge of defective workmanship, the contractor makes denial, and sets up that alleged defects, so far as they exist, were due to the orders of the owner in omitting supporting columns against the advice of the contractor; to changes on type of construction in which the owner assumed the risk; to the low grade of materials specified and used; to defects in the plans; to an omission not covered by this, but by the plumber's contract.

Some other issues are more or less stressed in the case; but the above will illustrate the scope and nature of the matters litigated between the parties.

A few questions of law are raised, which we think determinable upon elemental principles governing contracts.

This is a form of "cost plus" contract. The compensation of the contractor is made a flat fee instead of a commission or per centum on cost; and, instead of a regular contract for a completed job at a fixed price, there is covenant in the nature of a guaranty of maximum cost on the conditions named. The general conditions embodied in the specifications and drawings defining the duty of the contractor in matter of workmanship and material are part of the contract.

The construction company was a contractor with the duties incident to the relation, and not an agent or superintendent merely. True, the owner was to meet the weekly pay rolls for labor and material; but the contractor was to furnish the labor and order the materials in the owner's name. He had the duty to furnish competent labor and see that the material conformed to specifications.

While the specifications as drawn looked to the letting of the contract in the usual way, subject to the supervision of an architect, and the change of form of contract dispensing with an architect had the effect to strike out such specifications as were applicable only to the form of contract first contemplated, this did not strike out the general conditions requiring the contractor to construct the building in a good workmanlike manner; nor is the covenant as to cost a mere agreement to use due diligence as an agent to keep the cost within the limit stated.

Of course, if the owner take into his own hands the selection and purchase of material or employment of labor, the contractor's duty would be limited to proper supervision. The mere receipt and acceptance by the owner of bids for material to be furnished according to specifications would not relieve the contractor form his duties as such touching the quality of material delivered.

The covenant of maximum cost is limited by its terms of the construction of the building called for in the contract. If the owner, by virtue of her right to make changes, causes alterations and additions to be made which involve added cost, this, without more, would not waive the covenant, but the obligation would remain to construct the building within the cost limit after deducting the...