Cowles v. J. C. Mardis Co., 33361.

• Decision Date: 15 March 1921
• Docket Number: No. 33361.,33361.
• Citation: 181 N.W. 872,192 Iowa 890
• Parties: COWLES v. J. C. MARDIS CO. ET AL.
• Court: Iowa Supreme Court

192 Iowa 890

181 N.W. 872

COWLES

v.J. C. MARDIS CO. ET AL.

No. 33361.

Supreme Court of Iowa.

March 15, 1921.

Appeal from District Court, Polk County; Hubert Utterback, Judge.

Action in equity on a written contract, entered into between plaintiff, as owner, and J. C. Mardis Company, J. C. Mardis as sole proprietor of the Mardis Company, as general contractor, whereby the said contractor was to purchase all material and employ all labor necessary to complete, and would erect and complete, an office building in Des Moines, Iowa, for plaintiff, and against the United States Fidelity & Guaranty Company, of Baltimore, on its bond, guaranteeing the performance of said contract by the contractor, and against a large number of persons furnishing labor and material entering into the construction of the building, under contracts made by them with the general contractor. The parties interested in the controversy, having or claiming liens against the property, or liable in connection with the transaction, were made defendants, to the end that all the rights and liabilities of the respective parties interested might be determined. The result of the trial was that plaintiff was given judgment against the Mardis Company, Mardis, and the surety company for $45,539.72, made up of the following items: $19,354.03, the total amount for which the other defendants and cross-petitioners, who furnished labor and material, were given judgment against plaintiff and the Mardis Company; $23,185.69, the total amount of money expended by plaintiff in completing the building, over and above the amount agreed upon in the contract, after deducting all credits due the general contractor; and $3,000 damages for delay, on the part of the general contractor, at $50 per day, for 60 days, after deducting the number of days' delay for which the contractor was not chargeable. The surety company and Mardis have appealed, and plaintiff, in a cross-appeal, appeals from the judgments rendered against him in favor of subcontractors or materialmen, and from the refusal of the court to allow him damages for more days' delay than was allowed. Affirmed on all appeals.W. S. Ayres, of Des Moines, for appellants J. C. Mardis Co. and J. C. Mardis.

Miller, Kelly, Shuttleworth & Seeburger, of Des Moines, and R. E. Ball, of Kansas City, Mo., for appellant United States Fidelity & Guaranty Co.

Clark, Byers & Hutchinson, of Des Moines, and La Monte Cowles, of Burlington, for appellee and cross-appellant.

John L. Gillespie, of Des Moines, for appellees Thatcher & Adair, J. H. Queal & Co., Des Moines Steel Co., Frank Cram & Sons, and H. W. Loyer.

Read & Read, of Des Moines, for appellee Barrick & Son.

Henry & Henry, of Des Moines, for appellee Des Moines Bridge & Iron Works.

Sargent & Gamble, of Des Moines, for appellee Standard Glass & Paint Co.

Halloran & Starkey, of Des Moines, for appellees Holbrook Marble & Tile Co. and Love Bros.

Roy Cubbage, of Des Moines, for appellees Carr-Baal Co. and Loetscher & Burch Mfg. Co.

Clem F. Wade, of Des Moines, for appellee Bennet Bros. Coal Co.

Brammer, Lehmann & Seevers, of Des Moines, for appellee St. Louis Fire Door Co.

C. F. Maxwell, of Des Moines, for appellee American Luxfer Prism Co.

C. S. Bradshaw and F. T. Jensen, both of Des Moines, for appellee Des Moines Electric Co.

Price & Burnquist, of Ft. Dodge, and John L. Gillespie, of Des Moines, for appellee Plymouth Gypsum Co.

S. G. Van Auken, of Des Moines, for appellee Weather Proof Calking Co.

PRESTON, J.

J. C. Mardis Company is a trade name used by J. C. Mardis, and for the sake of brevity we shall refer to the Mardis Company and Mardis as Mardis, or the general contractor, and the United States Fidelity & Guaranty Company will be referred to as the surety company, or bonding company.

The record is a very long one, and we shall attempt to abbreviate and to avoid repetition by stating the issues which alone take up nearly 100 pages of the abstract, and by stating so much of the contract provisions as seem to be material to the controversy, and by stating the more important facts in a general way, to a better understanding of the general situation, and then take up somewhat more in detail the claims, contract provisions, and evidence as to the different propositions.

There was a stipulation as to some of the facts, which covers several pages of the abstract. The amounts due the various material and labor men were stipulated. As to some of the stipulated facts, the surety company objected to the materiality and relevancy thereof, and, while admitting such facts as stated, it does not admit liability under such facts. As to other stipulations, it was admitted by defendants that plaintiff and other witnesses, if called, would testify thereto, and that the defendants did not expect to controvert the same by evidence, but objections were reserved, which objections were made part of the stipulations. There is a conflict in the evidence at some points. We take it that the more important claim or defenses, of the several defenses interposed, is the claim that plaintiff falsely represented, in the written instructions to bidders, the fact as to what was the plaintiff's contract with the Morava Construction Company, of Chicago, for structural steel, and that the truth in reference to this matter was not known to defendants until after the making of the contract with the general contractor and the giving of the bond. Upon such discovery the surety company gave notice and attempted to cancel the bond, claiming that it was void from the time of the execution of the bond. Mardis makes the same claim as to the alleged misrepresentation as the surety company. A further claim is that the steel construction company, under its contract with plaintiff, had a longer time to furnish the structural steel than represented, which delayed the completion of the building and carried the time into the winter months, when building operations were more expensive, and that this was the cause of the increased cost of the building, and the delay in completion. Mardis, by way of counterclaim, asked judgment against plaintiff for $12,000 damages because of the misrepresentation, in that he was compelled to use tools and equipment for a greater time than would have otherwise been necessary, and for $15,000 commission; also asks judgment against plaintiff for any amount that might be found against Mardis on account of labor performed and material furnished on the building by interveners. The alleged false representation is the point most elaborately argued and apparently most relied upon by defendants for reversal.

The building contract was entered into March 10, 1916, and Mardis, as principal, and the surety company, as surety, executed and delivered a bond for the faithful performance of the contract. Thereafter Mardis entered upon the performance of the contract by purchasing material and employing labor. He failed to purchase the material or furnish the labor and prosecute the work as provided in the contract, or to pay for the labor and material required to complete the erection of the building according to the terms of the contract. The second year's premium on the bond, $1,060.75, was paid May 16, 1917, and it was stipulated that the limit of time for bringing suit as specified in the original bond was extended to March 15, 1918. The suit was brought March 14, 1918, though the building was not entirely completed, and could not be until about May 15, 1918. July 21, 1917, the surety company denied any liability under the bond issued by it, and plaintiff alleges that by its repudiation it waived the performance of all conditions precedent on the part of plaintiff to entitle him to recover, and waived all matters in carrying out the contract between plaintiff and Mardis. December 12, 1912, so plaintiff alleges, Mardis failed and refused to furnish labor and material for the completion of the building in accordance with the contract, and declined and refused to complete it. Thereupon the architects, as provided in the contract, made the proper certificate, and plaintiff took charge of the work on December 15, 1917, after proper notice. Plaintiff entered upon the premises and took possession of the tools and appliances, and proceeded to procure labor and material to complete the building in accordance with the contract, which he says he did under provisions of the contract. Plaintiff was not the owner of the fee title to the real estate upon which the building was erected, but had a leasehold interest only. The contract price was not to exceed $212,150. Extras were provided for in the contract, and plaintiff required extras in the sum of $37,440.49. The undisputed evidence shows that after plaintiff took possession of the work in December, 1917, he expended $38,130.86, and we understand this to be the aggregate total paid by plaintiff in completing the building and for extras. At the time the suit was brought plaintiff alleges he had paid out $272,404.62, and alleged that a further sum would be required to fully complete the building. Plaintiff alleged that he had no speedy and adequate remedy at law; that he had performed all conditions precedent by him to be kept and performed to entitle him to recover against Mardis and the surety. He prayed that the rights of the respective parties and materialmen, whether liens had been filed by them or not, be fixed and determined by the court, and that he have judgment against Mardis and the surety company for the cost of the labor and material entering into the building in excess of the amount provided for in the contract, and for damages for delays on the part of the general contractor in completing the work, for interest, and such other damages as plaintiff would be required to pay to complete the building, and for general equitable relief.

Mardis answered in general denial, but admitted the execution of the contract and bond; denies that plaintiff had...