City of Kennett v. Katz Const. Co.

Decision Date16 February 1918
Docket NumberNo. 20355.,20355.
Citation273 Mo. 279,202 S.W. 558
PartiesCITY OF KENNETT v. KATZ CONST. CO. et al.
CourtMissouri Supreme Court

Appeal from Circuit Court, Bollinger County; Peter H. Houck, Judge.

Action by the City of Kennett against the Katz Construction Company and the American Surety Company. Judgment for plaintiff, and from an order granting a, new trial, plaintiff appeals. Reversed and remanded, with directions.

Orville Zimmerman and Ely, Pankey & Ely, all of Kennett, Wm. Morgan, and Jones & Jones, of Kennett, for appellant. W. G Dinning, of Helena, Ark., and Oliver & Oliver, of Cape Girardeau, for respondents.

WALKED., P. J.

This is an appeal from an order granting a new trial. The appellant, the city of Kennett, to be designated herein as the city, brought suit in the circuit court of Dunklin county against the Katz Construction Company and the American Surety Company, to be designated herein respectively as the contractor and the surety company, each a corporation, upon a bond for $18,000 of the former as principal and the latter as surety, given to the city to insure the faithful performance of a contract for furnishing the necessary materials and labor to construct certain lines of sewers in the streets and alleys of the city and for the performance of other work incident thereto and necessary to facilitate the disposal of sewage, for which the contractor was to be paid a total sum of $35,204.06, in the amounts and at the times stated in the contract, and which contract, it was alleged, had been breached by the contractor. The surety company filed its separate answer. The city dismissed as to the contractor. A change of venue was granted on the application of the surety company to Bollinger county, where, upon a trial, a verdict was rendered for the city in the sum of $18,000. A motion for a new trial was sustained unless the city would enter a remittitur. This it refused to do, and perfected its appeal to this court.

The contract and bond on which this action is based contains, among other provisions, the following:

"And it is hereby expressly agreed by and between all parties thereto that no extension of time, or alteration in, addition to, or omissions from the work provided for under said contract, plans, and specifications, although without consent of said surety, shall violate this bond or discharge said surety. * * *

"Upon request of the contractor, the engineer will, upon or about the 1st of each month, make an estimate of work done and material delivered for the previous month, and payment will then be made by the council for 90 per cent. of said estimate."

The contract also provided that the work should be completed within nine months after its execution, which was in April, 1913, and for each day's delay the contractor should pay $5 per day as liquidated damages. Thereupon the contractor commenced work under the contract. Subsequently certain changes were made in the plans and specifications at the request of the contractor. According to the testimony of expert engineers, these changes did not increase the cost of construction or entail a delay in the work.

The work progressed under the contract until September 1, 1914. During this time 13 estimates were rendered by the contractor to the city, aggregating $32,436.86. Of this amount 10 per cent, was withheld in accordance with the contract, to be paid upon the completion and acceptance of the work, and the contractor was paid the difference, to wit, $29,193.17, less $645 held by the city for delays in the work, which constituted the aggregate up to that time of the penalty therefor of $5 per day as prescribed in the contract. Thereafter estimate No. 14 was rendered for work performed during the month of September, 1914, and the contractor was informed that the city was temporarily out of funds necessary to pay that estimate. The contractor then agreed that, if the city would pay 6 per cent, interest on the amount due, it would carry the warrant and proceed with the work, whereupon the warrant was issued for estimate No. 14 and delivered to it, and same was later paid, with interest thereon. Thereafter estimate No. 15 for work performed during the month of October, 1914, was rendered by the contractor to the city, and was settled in the same manner as estimate No. 14.

After the delivery by the city of its warrant to the contractor in payment of estimate No. 15 and the acceptance of same by it, owing to the amount of water in the ground where the sewers were being constructed, it was mutually agreed that work on the system should be suspended until such time as it was practicable to resume operations. At the time this agreement was entered into the contractor had been paid for all work then performed. The total estimate to this date for work performed amounted to the sum of $34,400.15. The amount paid to the contractor was $30,960.14. The difference between the total estimates for work performed and the amount paid the contractor was $4,390.01, $950 of same being the aggregate penalty for delays occasioned by the contractor, and the balance, $3,440.01, being the amount, 10 per cent., authorized to be withheld until the completion of the work.

Conditions thereafter permitting that work be resumed, the city notified the contractor to proceed to complete the work and that funds were available for its payment. At that time the city had available the sum of $6,100 for the payment of this work, or more than the balance due the contractor under its bid. The contractor refused to perform any more work under the contract. Whereupon the city gave notice to the surety company, as surety on the contractor's bond, of the abandonment by the latter of its contract, and requested the surety company to complete the work. This it failed and refused to do. Whereupon the city entered into another contract with one A. C. Brown in an endeavor to effect the completion of the sewer system in accordance with the original plans and specifications and the changes made at the request of the contractor, in which undertaking the city agreed to pay not exceeding $6,100 for the completion of the work, and it expended this sum in that behalf, which was found not sufficient for the purpose. Thereupon this suit was brought to recover on the bond, with the result stated. At the trial experts testified it would require an expenditure of $18,000 to $20,000 in addition to all former sums paid out by the city in that behalf to complete the sewer system in accordance with the original specifications and the changes made. The jury returned a verdict in favor of the city and against the surety company in the sum of $18,000; the city having, as stated, theretofore dismissed the action against the contractor. A motion for a new trial was sustained on the ground as stated in the order therefor that the city had refused to enter a remittitur, but, as disclosed by the record, that the trial court had erred in not instructing the jury that the right of recovery should have been limited to $6,100, that being the amount the city had expended in attempting to complete the sewer system. Other conditions of the contract, facts in evidence, and actions of the trial court will, if necessary for the proper understanding of the case and the determination of the issues, be set out in the opinion.

I. Review on Appeal from Interlocutory Order.—The general rule as to the extent to which this court will review a record upon an appeal from an interlocutory order as in the instant case, is as follows: When an order for a new trial is granted for a specific reason, the appellant assumes no other burden of showing error than that which prompted the trial court's action. If other grounds are relied on to sustain the order, which have been preserved in the record, the respondent must call the appellate court's attention to same, or they will not be considered. State ex rel. Bank v. Ellison, 266 Mo. loc. cit. 432, 181 S. W. 998; Benjamin v. Railroad, 245 Mo. loc. cit. 609, 151 S. W. 91; Emmons v. Quade, 176 Mo. loc. cit. 27, 75 S. W. 103; Millar v. Madison Car Co., 130 Mo. 523, 31 S. W. 574. The purpose of this rule is salutary. It sharpens the issues in enabling the appellant to directly combat the ruling of the trial court, and limits the review, upon appeal, to the reasons for such ruling instead of requiring a consideration of all the issues raised during the trial. The statutory provision which directs that orders for new trials shall specify the grounds therefor (section 2023, R. S. 1909) is, if nothing more, a legislative recognition of the wisdom of the rule. An examination and an analysis in the light of the record of the order sustaining the motion for a new trial will determine the rule of procedure applicable in a review of this case. It is as follows:

"Now come the parties herein by their respective attorneys, and defendant's motion for a new trial again coming on to be heard, it is taken up, argued, and submitted to the court, and the court, being sufficiently advised in the premises, orders that-the said motion should be sustained unless the plaintiff enters a remittitur of $11,900, which remittitur plaintiff now refuses to make. It is therefore ordered and adjudged by the court that said motion should be and is sustained, and a new trial herein ordered. To which ruling of the court the plaintiff objected and excepted at the time."

On its face this order may be construed as being based on an excessive verdict. Such a construction is tenable only upon a superficial consideration of the order. The authority to enter a remittitur, on account of an excessive verdict, is limited to cases where the jury finds for more than the amount authorized in the pleadings, the facts, and the instructions. This was rot the case here. The penalty of the bond, $18,000, was the limit, under the pleadings, of the city's right of recovery. The evidence...

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