City of St. Louis to Use of Carroll-Porter Boiler & Tank Co. v. Parker-Washington Co.

• Citation: 196 S.W. 767,271 Mo. 229
• Parties: CITY OF ST. LOUIS to use of CARROLL-PORTER BOILER & TANK COMPANY, Appellant, v. PARKER-WASHINGTON COMPANY and TITLE GUARANTY & SURETY COMPANY, Appellants
• Decision Date: 30 June 1917
• Court: United States State Supreme Court of Missouri

196 S.W. 767

271 Mo. 229

CITY OF ST. LOUIS to use of CARROLL-PORTER BOILER & TANK COMPANY, Appellant, v. PARKER-WASHINGTON COMPANY and TITLE GUARANTY & SURETY COMPANY, Appellants

Supreme Court of Missouri

June 30, 1917

Appeal from St. Louis City Circuit Court. -- Hon. Hugo Muench Judge.

Affirmed.

Judson Green & Henry for plaintiff.

(1) Under the contract and specifications in this case plaintiff's responsibility ceased, so far as the quality and condition of the pipe was concerned, when it had been duly inspected and accepted by the representative of the city of St. Louis. There is no evidence of any particular or substantial injury received by the pipe in the course of transportation. Therefore, the acceptance of the pipe by the city's representative, after he had duly inspected and tested it, as specified in the contract, terminated all liability or responsibility on the part of plaintiff, as between plaintiff and these defendants. Schaffer v Gildea, 3 Colo. 15. Where a contract provides that the architect shall pass upon all materials used in construction and condemn defective materials, which shall be promptly removed by the contractor, the failure of the architect to object as the work progressed constitutes a waiver. Siebert v. Roth, 118 Wis. 250; Laycock v. Moon, 97 Wis. 59; Lime Co. v. Shores, 105 Wis. 122; Electric Co. v. Iron Works, 116 Mich. 293; McConnell v. Water Co., 149 Cal. 60. (2) The evidence shows that each and every delay for which damages are claimed by the defendant, was caused either by the City of St. Louis and its agents, or by the Parker-Washington Company. In no instance was the Carroll-Porter Company to blame for any delay. The referee was correct in reporting that this action is in proper form. St. Louis to use v. Von Phul, 133 Mo. 561; Kansas City ex rel. v. Surety Co., 186 Mo. 281. While the Carroll-Porter Company is a foreign corporation, the delivery of the pipe sued for to the Parker-Washington Company, in the city of St. Louis, under the contract offered in evidence, was not such a transaction of business in the State of Missouri as would be in violation of our statutes. R. S. 1899, sec. 1025. Heating Co. v. Fixture Co., 60 Mo.App. 155; Woolen Mills v. Evans, 84 Mo.App. 450; Frick v. Marshall, 86 Mo.App. 472; Bruner v. Plow Co., 168 F. 218. The Carroll-Porter Company at no time had or maintained any office in this State or employed any local agent in connection with the contract in question. The contract was signed by the Carroll-Porter Company's president in St. Louis, Missouri, and by its secretary, and the corporate seal attached in the State of Pennsylvania; and the pipe was manufactured in the State of Ohio, and plaintiff's duties under the contract terminated immediately upon the arrival of the pipe in St. Louis on cars of the carrier companies. This did not constitute the transaction of business within the State of Missouri; and if our statute should be so construed, it would be unconstitutional as an unlawful interference with interstate commerce. Shoe Co. v. Rubber Co., 156 F. 1; Bruner v. Plow Co., 168 F. 218. (4) The Parker-Washington Company received and accepted this pipe, used it on the construction of its flow line, and collected from the city the full contract price therefor. It is therefore bound, when sued on the contract for the contract price, to pay the amount agreed upon, less such sums, if any, as it was compelled to expend in remedying defects in plaintiff's shop work. The fact that the shop work was defective, if it was defective, does not prevent plaintiff from suing on the contract for the contract price, under the facts we have here. Brown v. Weldon, 99 Mo. 565; Triplett v. Montgomery, 81 Mo.App. 141. The defendant cannot recover any damages at $ 25 per day for "delays" because the city extended the time for the performance of the work, and the Parker-Washington Company did not suffer any damage from such delays. That clause of the contract is a penalty clause and not a liquidated damage clause. Connelly v. Priest, 72 Mo.App. 673; Parlin v. Bank, 84 Mo. 67; Zimmermann v. Conrad, 74 S.W. 139.

S. Mayner Wallace, Wm. R. Orthwein and Shepard Barclay for defendants.

(1) The relator is a foreign corporation and did not have a license as such to do the business it agreed to do as sub-contractor for the construction of the flow line in Missouri, and hence cannot recover. R. S. 1909, secs. 3037-40. (2) The construction of the flow line for the city of St. Louis, under its contract with the P.-W. Co., required the steel pipe to be furnished by relator in certain definite forms to be installed in fit condition for the use required. The pipe was to be made to conform to city inspection "complete in place" and to be delivered by relator to the purchaser in Missouri. The business was in this State, and was not interstate commerce. Bacon v. Illinois. 227 U.S. 504; Glue Co. v. Glue Co., 187 U.S. 611; Anglo-Am. Pro. Co. v. Davis Co., 191 U.S. 373; Shoe Co. v. Ramlose, 210 Mo. 631; Tomson v. Assn., 129 N.W. 529; Railroad v. Const. Co., 162 Ala. 396; Oil Co. v. Com., 52 S. E. (Va.) 390; Parke-Davis v. Mullett, 245 Mo. 168; Zinc Co. v. Mining Co., 221 Mo. 7; Chicago Co. v. Simms, 197 Mo. 507; Buffalo Co. v. Penn. Co., 178 F. 696; Banker v. Pennsylvania, 222 U.S. 210; Tilden v. Blair, 21 Wall. 241. (3) The relator pleads full compliance with the contract and the testimony shows there was no such compliance. A recovery in this State of reasonable value for work or materials done or furnished is not recoverable on an allegation of performance of the contract under which the same were done or furnished. Everman v. Association, 61 Mo. 489; Hayes v. Bunch, 91 Mo.App. 467; Wade v. Nelson, 119 Mo.App. 289; Huston v. Tyler, 140 Mo. 252; Skinner v. Young, 106 Mo.App. 617; Reifschneider v. Beck, 148 Mo.App. 725; Raming v. Railway, 157 Mo. 506; Brown Co. v. MacArthur, 236 Mo. 51. (4) The amount agreed to be paid by the relator (at rate of $ 25 per day) after default as liquidated damages was properly so estimated, as the uncertain nature and extent of the injury to the general construction work of the entire flow line made such agreement proper and appropriate. Tompson v. St. Charles County, 227 Mo. 237; Malone v. City, 147 Pa. St. 416; Clark v. Barnard, 108 U.S. 461; Kemp v. Ice Co., 69 N.Y. 45; May v. Crawford, 150 Mo. 504. (5) Where the nature of the damage is uncertain, such a provision as is here shown is valid and enforceable. Parker-Washington Co. v. Chicago (unreported), Ill.App. (March 5, 1914.)

GRAVES C. J. Bond, J., dissents in opinion filed; Woodson, J., concurs in result.

OPINION

In Banc.

GRAVES, C. J.

In the lower court this case was first heard by a referee. This referee made a complete finding of facts, and stated his conclusions of law. Such referee recommended judgment for relator in the sum of $ 27,513.85, and to his report both parties filed exceptions. Relator's exceptions were, by the court, sustained in part and overruled in part. Defendants' exceptions were overruled in toto. Both sides have appealed.

The court gave judgment for relator in the sum of $ 38,441.28. The record recites that the reference was by consent, the order therefor reading:

"Tuesday, January 5, 1909.

"Now at this day come the parties, plaintiff and defendants, by their respective attorneys, and consent and agree that this cause may be referred to Francis J. McMaster, Esq., whereupon it is ordered by the court that this cause be, and the same is hereby referred to Francis J. McMaster, Esq., to try all the issues involved therein, and to report his findings and proceedings to the court with all convenient speed."

The referee has, with great care, outlined the case and the pleadings therein, and this we borrow from him:

"This suit was instituted by plaintiffs to recover from defendants the unpaid balance of the contract price for certain materials furnished defendants, the Parker-Washington Company, under a contract with it, to be used by it in constructing what is known as a 'flow line,' for the city of St. Louis, from the Chain of Rocks to the Baden Pumping Station, under and in pursuance of a contract between said city and said defendants, and in pursuance of Ordinance No. 21807 of said city, approved March 24, 1905.

"Plaintiff's petition shows that this suit was instituted in the name of the city of St. Louis to the use of Carroll-Porter Boiler & Tank Company against the Parker-Washington Company, and the Title Guaranty & Surety Company of Scranton, Pennsylvania the latter company being the company that executed the bond, required by the city of St. Louis from the Parker-Washington Company, for the faithful performance of its contract with the city.

"The petition further alleges that the Carroll-Porter Company was incorporated under the laws of the State of Pennsylvania, and that the Surety Company was incorporated under the laws of the State of Pennsylvania, and further alleges, by an amendment, that the Surety Company 'has been duly authorized to do business in this State under the statutes relating to Foreign Insurance Companies.'

"That on May 2, 1905, the Parker-Washington Company made a contract with the city of St. Louis, hereinafter called 'the City,' under its charter and ordinance, to construct and lay certain piping, complete in place, from Chain of Rocks to Baden Pumping Station. That the work was to be done under the direction and subject to the inspection of the Water Department of the city, the consideration being $ 478,000, which was to be paid on monthly estimates, less fifteen per cent on the contract price, which latter was to be paid after final acceptance by the city.

"That the Parker-Washington Company made and delivered to the city its bond signed by...