City of Chariton v. J. C. Blunk Const. Co., 50317

CourtUnited States State Supreme Court of Iowa
Writing for the CourtH. S. Life, Oskaloosa, H. E. De Reus, Knoxville, for appellant; THOMPSON; All Justices concur except BLISS
Citation253 Iowa 805,112 N.W.2d 829
PartiesThe CITY OF CHARITON, Iowa, For Itself, Abutting Property Owners, and General Tax Payers of the City, Appellee, v. J. C. BLUNK CONSTRUCTION COMPANY, a co-partnership, Estella M. Blunk, Donald J. Blunk, St. Paul Mercury Indemnity Company and Employers Mutual Casualty Company, Appellants.
Docket NumberNo. 50317,50317
Decision Date09 January 1962

Page 829

112 N.W.2d 829
253 Iowa 805
The CITY OF CHARITON, Iowa, For Itself, Abutting Property Owners, and General Tax Payers of the City, Appellee,
v.
J. C. BLUNK CONSTRUCTION COMPANY, a co-partnership, Estella M. Blunk, Donald J. Blunk, St. Paul Mercury Indemnity Company and Employers Mutual Casualty Company, Appellants.
No. 50317.
Supreme Court of Iowa.
Jan. 9, 1962.

[253 Iowa 809]

Page 831

H. S. Life, Oskaloosa, H. E. De Reus, Knoxville, for appellant, J. C. Blunk Construction Co., copartnership, Estella M. Blunk and Donald J. Blunk.

J. R. McManus, Des Moines, for appellant, St. Paul Mercury Indemnity Co.

Bradshaw, Fowler, Proctor & Fairgrave, Des Moines, for appellant, Employers Mutual Casualty Co.

A. V. Hass, Chariton, for appellant, Employers Mutual Casualty Co.

Virgil E. Meyer, City Atty., Stuart & Stuart, and W. W. Bulman, Chariton, for appellee, City of Chariton, For Itself, Abutting Property Owners and General Taxpayers of City.

THOMPSON, Justice.

Plaintiff's action, in four counts which we shall designate as Counts I, II, III, and IV, was in essence for damages for breach of four contracts entered into between the City of Chariton and the defendant J. C. Blunk Construction Company, a co-partnership, hereafter known as the contractor, for the construction of paving in the city. The defendant St. Paul Mercury Indemnity Company, hereafter known as St. Paul, was the surety on the contractor's performance bond on the first two contracts, and the defendant Employers Mutual Casualty Company, hereafter known as Employers, was surety on the bond on the third and fourth contracts. Trial resulted in a jury verdict for the plaintiff city on Count 1 in the sum of $13,500.00; Count 2, $39,600.00; Count 3, $22,500.00; and Count 4, $27,200.00. Judgment was entered on the verdicts against the contractor in the total amount of $102,800.00; against St. Paul on Counts I and II, $53,100.00; and against Employers on Counts III and IV, $49,700.00. All defendants appeal.

[253 Iowa 810] The plaintiff entered into four contracts with the contractor for the paving of certain streets in the city, on September 2, 1950; October 5, 1951; June 17, 1952; and September 14, 1953. The work was done and accepted by the city on various dates thereafter, and payment made. It is to recover damages for what is now claimed to be defective performance of the contract that the present suit is brought, each count of the petition being based respectively on alleged breaches of the separate contracts in the order of their date. After the acceptances of the work and payment, it is claimed the city discovered the failures of the contractor to comply fully with its contract, and this action was commenced in 1955. The parties marched and counter-marched with many motions, amendments, and rulings of the court; and trial of the case when it was finally at issue required more than one month. So we have a voluminous record of approximately 1,800 pages of printed matter; and the plaintiff and each defendant have argued the issues at length. However, the questions to be determined as we view the case are entirely law points. While the defendant contractor at least does not so concede, we have concluded that there was a jury question on the sufficiency of the performance of the work. The basic claim of the city was that the thickness of the cement in the paving was not sufficient to meet the specifications. Many tests were made and hundreds of 'cores', or segments taken by borings into the pavement at various points, were introduced in evidence. There was evidence of insufficiency of the required depth of cement in inches ample to require a fact finding decision. This feature of the case will be discussed in later divisions.

I. From the legal standpoint, the first three contracts stand on a different basis than the fourth. As to these three a question of res adjudicata arises which is not present in considering No. 4. It appears that after the first three jobs had been completed,

Page 832

as claimed by the contractor, the work was approved by the city engineer and accepted by the city council. No question is made as to the legality of the acts of the council in so doing. Apparently much of the contract price had been paid by assessments against abutting property owners; but there was a balance under the three contracts of $69,915.20, with interest from date of the respective completions, payable from general[253 Iowa 811] funds of the city. On October 16, 1953, the contractor, by its trustee, as to whose authority no question is raised, served an original notice on the city notifying it that a petition was then on file, alleging completion of the work and that the sum of $69,915.20, with interest, was due the contractor. The petition among other things alleged: 'Par. 4. That the said J. C. Blunk Construction Company, by virtue of said contracts entered into and upon the work contemplated thereby, furnishing the labor, tools, plant, materials and services, all as therein set forth, and that said contractor has now fully performed each of his said respective contracts.'

The city promptly filed its answer, admitting its corporate existence and capacity and denying the other material allegations of the petition for lack of information. On October 20, 1953, a stipulation was entered into by the parties providing the case might come on for hearing at the earliest convenience of the court, and that it might be tried by the court without a jury. On October 21, 1953, the court entered its written judgment. Therein it was stated: 'Second. This court has received complete and satisfactory evidence to enable it to pass upon the merits of the action and to adjudicate the rights of the parties.' It was adjudged that the sum of $69,915.20, with interest, as claimed, was due the plaintiff, and judgment was rendered accordingly, with costs taxed to the defendant city. Shortly thereafter the judgment was paid and satisfied of record.

It will be observed that the petition alleged the completion of the work in accordance with the first three contracts, and the court so found. The court also stated it had received complete and satisfactory evidence so that it could pass upon the merits of the action. It is this judgment which the defendants in the instant case claim to be an adjudication of all matters in controversy concerning the proper completion of the work in accordance with the first three contracts; and they allege the city is now estopped to relitigate any claim for damages for breach of the contracts.

II. The city attempts to meet the pleas of res adjudicata in these ways: 1, the judgment was by consent and so is not effective as an adjudication of the merits; 2, the issues were [253 Iowa 812] different; 3, the parties were different; and 4, there was fraud in obtaining the first judgment now relied upon. We shall discuss these contentions in order.

III. We are unable to agree that the record here shows that the judgment in the first case, No. 17,374, was consent judgment; or that if it did so appear, it would not be binding as an adjudication. First, however, we should refer to some testimony offered by the plaintiff to prove the judgment was by consent, which upon objection of the defendants was kept from the record. One Phil Dorweiler, after testifying that he was an attorney, was asked about his connection with case No. 17,374. He testified that he was attorney for the city of Chariton in connection with bond matters; but he was not permitted to say how it happened that the suit was brought. An offer of proof was made, from which it appeared that there was doubt whether the city could legally issue general obligation bonds to pay the amount then assumed to be due the contractor on the first three contracts; and he concluded it would be best to have what he termed a 'friendly' action brought and a judgment had against the city so that judgment funding bonds, as to the legality of which there would be no question, might be issued to pay the contractor. That the judgment in Cause No. 17,374 was had with the consent of all parties. Objection was made to this offer of proof and sustained by the court.

Page 833

It may be this evidence should have been admitted, and the plaintiff entitled to the benefit of it in this court. 'The successful party may, without appealing or assigning errors, save the judgment if an error was committed against him which, if corrected, will make the result reached below a right result.' Iowa Electric Company v. Home Insurance Company, 235 Iowa 672, 676, 17 N.W.2d 414, 416. But, assuming the admissibility of this testimony, we think there is an insufficient showing that the judgment was by consent. A judgment does not become a judgment by consent even though the parties have added their consent to an adjudication of the court. 49 C.J.S. Judgments § 173, page 309. In the case before us, the court said it had before it 'complete and satisfactory evidence to enable it to pass upon the merits of the action.' There is no indication in [253 Iowa 813] the judgment itself that it was a consent judgment. Many courts hold the consent must appear on the face of the record. Blair v. Dickinson, 136 W.Va. 611, 68 S.E.2d 16, 18; Clement v. Ferguson, Okl., 287 P.2d 207, 211; Culpeper National Bank of Culpeper v. Morris, 168 Va. 379, 191 S.E. 764, 767. In Harter v. King County, 11 Wash.2d 583, 119 P.2d 919, 923, in a situation identical with the one before us here, it is said: 'In the instant case the court * * * purports to rest its decree upon the evidence in the case, not upon any consent of the parties, and the decree must be taken as evidencing the studied decision of the court, based on evidence rather than on an agreement of the parties.'

Nor are we prepared to agree that a consent judgment is not an adjudication against the parties. We quote from 30A Am.Jur., Judgments, Sec. 150, pages 256, 257: 'And notwithstanding...

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