Ashland Lime, Salt & Cement Co. v. Shores

• Decision Date: 15 December 1899
• Court: Wisconsin Supreme Court
• Parties: ASHLAND LIME, SALT & CEMENT CO. ET AL. v. SHORES ET AL.

105 Wis. 122

81 N.W. 136

ASHLAND LIME, SALT & CEMENT CO. ET AL.

v.SHORES ET AL.

Supreme Court of Wisconsin.

Dec. 15, 1899.

Syllabus by the Judge.

1. Where a building contract provides that a supervising architect representing the owner shall inspect the material and construction as operations progress, with power to reject any and all material and construction not deemed by him to conform to the contract, a failure to promptly reject any such material or construction for defects discoverable by the exercise of ordinary care, after a fair opportunity for exercising the duties of inspection, constitutes a waiver of such defects.

2. Where both parties to a building contract, providing for payments to be made on progress certificates, ignore such provision from the commencement to the end of operations, such provisions will be deemed waived.

3. Where the progress certificates are limited by the contract to such portions of the building as have been constructed in a manner satisfactory to the supervising architect under the contract, they are not subject to revision at all, in the absence of some provision to that effect in the contract; and an accompanying provision to the effect that such certificate shall not be conclusive should be construed to extend only to defects that were not discoverable by the exercise of ordinary care prior to the giving of the progress certificate.

4. Where a building contract has been only substantially performed, the measure of damages recoverable by the proprietor is the reasonable cost of remedying such defects as are remediable without unreasonable expenditure, and the diminished value of the building when so completed from the value of a building constructed in all respects according to the contract.

Appeal from circuit court, Ashland county; John K. Parish, Judge.

Action by the Ashland Lime, Salt & Cement Company and others against Emma W. Shores and others. Judgment for plaintiffs, and defendants appeal. Affirmed.

Action to enforce several subcontractors' liens upon a dwelling house and the grounds upon which it was situated. The controversy involved the validity of several of the lien claims. The principal contract was between John H. Foster and Frank Houle as builders, and Emma W. Shores as owner. Houle sold out early to Foster, the latter assuming and agreeing to carry out all of the provisions of the contract upon the part of the builders. The principal contract price was $28,570, subject to additions and deductions on account of alterations that might be required and ordered by the supervising architect. The principal subcontract was with the Northern Manufacturing Company for the inside mill work of the building, the contract price for such work being $5,950, subject to additions and deductions as in the principal contract. Such subcontractor, before its work was done, made an assignment for the benefit of creditors to A. E. Dixon, who claimed to have completed the work. The amount claimed to be due on such subcontract was $2,904.76. There was a claim by the Ashland Lime, Salt & Cement Company for $149 for material furnished the principal contractors. Also a subcontractor's claim by P. J. Dullanty for $971.84, alleged to be due on a plumbing contract. There were several other claims, but those particularly mentioned were the subjects of the controversy. The pleadings on the part of the claimants did not set forth the terms of the principal contract, or the subcontract with the manufacturing company. Such company's pleading stated in general terms that it and A. E. Dixon, its assignee, furnished to the principal contractors at their request, work, labor and material in the construction of the building and that the amount due therefor was $2,904.76. It admitted delay in performing the contract, but alleged that it was caused by the conduct of the principal contractors and their architect and was waived by them. It also alleged, without stating facts requiring an appraisal of the value of extras furnished by the subcontractor, that the supervising architect willfully refused to appraise and value such extras as were furnished, or to submit the matter to arbitration. There were answers by the principal contractor and the owner, setting forth the principal contract, the contract with the manufacturing company, and the contract with Dullanty for the plumbing. A breach of contract in each case was alleged, and there was a counterclaim for damages, those claimed against the manufacturing company and its assignee being $6,200, and against Dullanty $2,500. Replies were duly made to the counterclaims, alleging excuse for nonperformance of the manufacturing company's contract as to time and substantial performance of such contract in all other respects and of the other contracts mentioned. The principal contract required the building to be completed by the 1st day of July, 1898, and the subcontract with the manufacturing company provided for completion of the work covered by it by the 1st day of May, 1898. Each contract provided for the payment of $5 per day as liquidated damages for each day's delay not caused by certain specified circumstances, for which the architect was to make proper allowances subject to an appeal to arbitrators. The principal contract and the subcontract with the manufacturing company were identical as to all general provisions. Each contained the following stipulations: The work shall be performed under the direction and to the satisfaction of John W. Foster, acting as agent of the owner; the contractors shall, within 24 hours of receiving written notice from the architect to that effect, proceed to remove from the grounds or building all materials condemned by him, whether worked or unworked, or take down all portions of the work which the architect shall condemn as unsound or improper, or as in any way failing to conform to the drawings and specifications, and to the conditions of this contract; the architect shall be permitted to inspect the work at all times during the progress of the building, and shall be provided with sufficient, safe and proper facilities for that purpose by the contractors; in case the work is delayed by the fault of any other contractor, or any alteration required, or damage by fire or unusual action of the elements or otherwise, or abandonment of the work by employés through no fault of the contractor, such contractor shall be allowed additional time beyond the date set for the completion of the work, such allowance to be made upon a claim in writing made at the time of the obstruction or delay, and the architect to certify the additional time to be allowed, subject to an appeal from his award to arbitrators; on the 1st day of each month as the work progresses, a payment shall be made for 85 per cent. of the work done during the preceding month, based on an estimate approved by the architect and certified by him that such work has been done to his satisfaction; no certificate given or payment made, except a final certificate or final payment, shall be conclusive evidence of the performance of the contract either in whole or in part, and no payment shall be construed to be in acceptance of defective work.

The cause was tried before a referee who made findings of fact and conclusions of law covering all the issues. Such findings, as to the matters controverted on the evidence and material to the appeal were in substance as follows: The Northern Manufacturing Company proceeded to perform its contract according to the terms thereof. The architect, agreed upon to superintend and pass upon the work as it proceeded, was constantly present in the performance of his duties during the time the building was being constructed. He changed the plans from time to time as he was authorized to do, and the company was required to conform thereto. He permitted and sanctioned the use of other building material in the building than such as was called for by the specifications, particularly the use of flat-sawed in place of quarter-sawed oak in the second and third stories. The principal contractor greatly delayed the manufacturing company in its work. Payments to the amount of $4,500 were made to the manufacturing company without any architect's certificate or estimate. No such certificate, from first to last, was asked for, demanded or required. The provisions of the contract in that regard were wholly ignored and waived. The architect did not condemn any of the work or material in accordance with the terms of the contract. He refused to value the extras furnished under the manufacturing company contract or to submit the matter to arbitration as the contract provided. The manufacturing company and its assignee, without the consent of the architect, neglected to perform the manufacturing company contract in the following particulars: Using flat-sawed oak in place of quarter-sawed oak in the first story; omitting to do blind nailing at all points required; using some wood on the inside finish which was not thoroughly seasoned; and by inexcusable delay in the performance of the work for 25 days. The Northern Manufacturing Company contract and the principal contract, on the whole, were substantially performed. In respect to those matters where there was a departure from strict performance, liability for damages was incurred to the amount of $1,000, which should be allowed as a counterclaim to the amount of the claim of the assignee of such company, leaving the balance due for work done under the contract, and for extras, $1,550.74. The claim of the Ashland Lime, Salt & Cement Company was originally $149, and should be reduced by payments which were made thereon, to $124.34. The Dullanty contract for the plumbing work was substantially performed. The balance due him therefor, and for extra work, is $971.84. The referee's report was confirmed by the court, except as to the amount found due Dullanty for the plumbing work. That was...