Austin-Griffith v. Goldberg

• Decision Date: 21 December 1953
• Docket Number: I,No. 16808,AUSTIN-GRIFFIT,16808
• Parties: , 42 A.L.R.2d 1123 nc. v. GOLDBERG et al.
• Court: South Carolina Supreme Court

Page 447

79 S.E.2d 447

224 S.C. 372, 42 A.L.R.2d 1123

AUSTIN-GRIFFITH, Inc. v. GOLDBERG et al.

No. 16808.

Supreme Court of South Carolina.

Dec. 21, 1953.

S. E. Rogers, Charles N. Plowden, Summerton, for appellants.

Berry & Berry, Orangeburg, J. G. Dinkins, Manning, for respondent.

OXNER, Justice.

This is a statutory proceeding to establish and foreclose two liens for labor and materials furnished by Austin-Griffith, Inc. in the erection of a building for Dorothy R. Goldberg and her husband, M. M. Goldberg.

On March 15, 1949, Austin-Griffith, Inc. entered into a contract with the Goldbergs, who then operated a tourist court in Clarendon County, near Summerton, to erect, according to certain plans and specifications, an additional building on the premises for $32,200. The contract price was to be paid in installments based on a certain percentage of the value of the labor and materials incorporated in the work and of the materials stored at the site, as estimated by the architect. Upon substantial completion of the entire work, the contractor was to receive a sum sufficient to increase the total payments to 90% of the contract price. The remaining 10% was to be paid upon a final certificate of the architect that the contract had been fully completed and the work was acceptable.

The job was to be completed on or before July 15, 1949, and the contractor agreed that for each day thereafter that the contract remained uncompleted, the owner could deduct and retain from the contract price as liquidated damages the sum of $50. It was further provided, 'that if the completion of this contract is delayed by the owner, an act of God, or casualty beyond the control of the contractor then in such event, the time of completion of this contract shall be extended for such additional time as should be considered (caused) by such delay, provided, however, that the contractor herein shall at the time of such delay, if any, demand of the owner in writing such additional time within which to complete the performance of this contract.'

The provision as to alterations and extra work was as follows:

'The owner shall have the right at any time to make changes, additions, or omissions that he may desire and the same shall be executed by the contractor as a part of this contract, without impairing its validity, and the changes, and the value of the changes are to be agreed upon in writing to the architect and added or deducted from the contract price as the case may be.

'No claim for work will be allowed unless the same is ordered in writing by the owner thrugh the architect, and the cost agreed upon, and stated in the order.

'No alteration shall be made in the work except upon written order of the architect, the amount to be paid by the owner or allowed by the contractor by virtue of such alteration to be stated in said order.'

It was agreed that if the contractor neglected to supply sufficient materials or workmen or abandoned the contract, the owner could, after first giving three days' notice in writing by registered mail, provide the necessary materials and workmen to complete the job and charge the costs thereof to the contractor. The contractor further agreed to make good any defect arising from faulty materials or workmanship, which appeared within three months after the completion of the building.

Finally, it was stated that 'should any dispute arise respecting the true construction or meaning of the drawings or specifications, the same shall be decided by the architect, whose decision shall be final and conclusive.'

The other terms and conditions of the contract are not material to this controversy.

Construction was commenced immediately after the execution of the contract. During the progress of the work, the contract was twice amended. The first amendment, executed on May 26, 1949, provided that the owner, instead of the contractor, would furnish and install the heating system and certain window and door screens. The agreed value of these eliminations was $3,155, thereby reducing the contract price to $29,045. Under the second amendment, executed on August 24, 1949, the contractor was relieved of the responsibility of furnishing and installing the kitchen sink and cabinets, the agreed value of which was $250, thereby further reducing the contract price to $28,795.

During the course of construction, the sum of $18,519.18 was paid to the contractor. On July 15, 1949, the time fixed in the contract for completion of the building, the job was far from finished. Finally, on September 10, 1949, the contractor, claiming that the owners had breached the contract in several particulars, ceased work, and on September 20th filed two mechanics' liens against the premises, one for an alleged balance due on the contract, and the other for alleged extra work. On September 22, 1949, Goldberg notified the contractor by letter that unless work was resumed by September 28th, he would take over the job and finish the building, charging the costs thereof to the contractor. Work was not resumed and on October 4, 1949, Goldberg notified the contractor that the owners would proceed immediately to complete the building.

On February 16, 1950, this action was commenced for the foreclosure of the two mechanics' liens which had been filed. It was alleged in the contractor's petition that subsequent to the execution of the contract on March 15, 1949, from time to time the parties entered into oral agreements for work in addition to that stipulated in the contract; that all terms and conditions of the contract were duly performed by the contractor until September 10, 1949, when it was forced to discontinue construction because of the failure of the owners (1) to make payments as provided by the contract, (2) to make selection of materials as they were required to do, and (3) to allow the workmen on the job to continue with construction in accordance with the agreements between the parties. It was further alleged that the contractor was entitled to a lien for $7,055.82, representing the balance due on the contract, and for the further sum of $4,763.25, representing extra work done at the request of the owners.

An answer was duly filed by the Goldbergs. They denied entering into any agreement for extra work and further denied any breach of contract on their part. They alleged that the contractor failed to construct the building in accordance with plans and specifications; that it finally abandoned the contract, necessitating the job being completed by the owners; and that on account of the unsatisfactory condition of the building when abandoned, due to failure to carry out specifications and faulty workmanship, it was worth no more than had been already paid on the contract. They then proceeded to set up by way of offset (1) a claim of $270 on account of the failure of the contractor to pay for certain sand used in the construction of the building; (2) a claim for liquidated damages in the sum of $4,900 for failure to complete the work within the time fixed by the contract; (3) expenses of $3,000 incurred in finishing the job; (4) a claim of damages in the sum of $10,000 because of decrease in the value of the building due to failure to follow plans and specifications and faulty workmanship; and (5) a claim for damages in the sum of $10,000 for loss of the use of the building resulting from the failure to complete it within the stipulated time, which delay, it was also claimed, resulted in the loss of the commitment for a loan which the owners had obtained.

The Bank of Summerton, which was made a party respondent along with the Goldbergs under an allegation that it claimed some interest in the premises, filed an answer alleging that it held two mortgages on the property executed by the Goldbergs, one in the sum of $10,000, dated March 26, 1949, and the other for $14,000, dated October 1, 1949. It asked that the priority of its liens be determined.

The contractor, in reply, entered a general denial to all the claims for offsets made by the Goldbergs.

The cause was referred to a member of the Sumter Bar as Special Referee. Three extended references were held and, by consent of the parties, the Referee viewed the building in controversy. In a well-considered report filed on August 11, 1951, he found (1) That the only extra work done by the contractor was completing the 'breezeway', at a cost of $163.29. (The owners concede the correctness of this item and that credit therefor should be allowed the contractor); (2) that all other claims for extra work should be disallowed because (a) such work was included in the plans and specifications, and (b) there was no written request therefor as required by the contract; (3) that the contractor failed to erect the building according to the plans and specifications and without justification abandoned the contract; (4) that in numerous particulars the workmanship was faulty; (5) that the owners did not materially interfere with the work of the contractor but 'were merely trying to insist that the erection be according to specifications, which were not followed'; and (6) that 'until the statement of August 30, 1949, payments were satisfactorily made under the contract', and that the owners were justified in refusing to pay the statement rendered on August 30th and the subsequent demands made by the contractor.

By way of offset, the Referee allowed the owners the following credits: (1) $270 on account of the failure of the contractor to pay for certain sand which went into the building; (2) $749.15 expended by the owners in completing the job; (3) $1550 representing a decrease in the value of the building brought about by a failure to follow specifications and by defective workmanship; (4) $4,900 as liquidated damages for failure to complete the contract on time; and (5) $894.40 for repairing a defect in the hot water line which appeared in December, 1949, shortly after the owners had...