Crankshaw v. Stanley Homes, Inc.

• Decision Date: 20 May 1974
• Docket Number: 3,No. 49082,Nos. 1,2,49082,s. 1
• Citation: 131 Ga.App. 840,207 S.E.2d 241
• Parties: Charles H. CRANKSHAW v. STANLEY HOMES, INC
• Court: Georgia Court of Appeals

Page 241

207 S.E.2d 241

131 Ga.App. 840

Charles H. CRANKSHAW v. STANLEY HOMES, INC.

No. 49082.

Court of Appeals of Georgia, Division Nos. 1, 2, 3.

May 20, 1974.

Charley G. Morris, East Point, for appellant.

Gambrell & Mobley, Robert D. Feagin, Henry G. Ciocca, Atlanta, for appellee.

Syllabus Opinion by the Court

EBERHARDT, Presiding Judge.

Charles H. Crankshaw, d/b/a C. H. Crankshaw Drywall Company, brought suit against Stanley Homes, Inc. of Georgia on a contract under which Crankshaw, for the contract price of $52,300, agreed to perform the drywall work for defendant at its Mount Zion Village apartment complex. There was evidence that Crankshaw had completed virtually all of the work except for a portion of Building 10 before defendant terminated the contract. Defendant moved for a directed verdict on the grounds that Crankshaw's damages had not been sufficiently proven, which was granted, and Crankshaw appeals. Held:

1. Where a contractor or a sub-contractor has been prevented by the owner from completing his contract in the construction of a building, generally the measure of damages which he may claim for the wrongful breach is stated in Campbell & Co. v. Mion Brothers, 6 Ga.App. 134(3), 64 S.E. 571: 'Where one employs another to furnish the labor and material to do the work necessary to the improvement of real estate, but renounces the contract prior to the time when the contractor has incurred any expense toward the performance of it, the recovery for the breach of the contract is limited to the difference between the contract price and what it would have cost the contractor in labor and materials to have performed it.'

But there is a further rule, as stated in that case, which applies when the contractor has expended money in the purchase of materials which he may have to dispose of at a loss, in which event the rule is: 'But, if the contract is not broken until after the contractor has gone to expense toward its performance, the net loss incurred by him on account of the amount so expended should be added to the difference between the contract price and what it would have cost him to perform the contract.' It is perhaps not a general experience that the contractor has purchased materials which have not been worked into the building and which he must dispose of at a loss, for these are generally returnable to suppliers for full credit. But it may well happen that some item has been specially ordered for use on the particular job which would not be usable on most others, in which event the contractor may have to dispose of it at a loss.

This is fully illustrated in Campbell v. Mion, supra, where the contractor had purchased $166.46 worth of tile for use on the job and because of the owner's breach of the contract, had to dispose of it for $95.00. Recovery was allowed for loss of profit plus his loss of $71.46 on the tile.

These rules are also found in 5 Corbin on Contracts, § 1094, pp. 510-514. Basically where the contract is wrongfully breached by the owner the contractor is entitled to recover damages measured by his actual expenditure to the date of breach, less the value of the materials he has left on hand, plus the profit he would have realized in the event of complete performance, but in no event to exceed the contract price. If progress payments have been made by the owner, he is entitled to credit therefor.

Where the contract is to be performed for a fixed sum or price, it is immaterial to the owner whether the contractor's expenditures have been prudently made or not, provided full performance would not have resulted in a net loss. If it appears that full performance would have resulted in a net loss, the amount of the loss must be deducted from his recovery.

Some confusion has arisen relative to the correct measure of damages which the contractor may recover against an owner who has wrongfully terminated the contract before completion because of a statement of the measure in Herrman v. Conway, 83 Ga.App. 888, 891(2), 65 S.E.2d 41, where there was a misinterpretation of the rule which Judge Powell had stated in Campbell & Co. v. Mion Brothers, 6 Ga.App. 134(3), 64 S.E. 571, supra. The confusion appears again in Robertson v. Gore, 115 Ga.App. 537, 538, 154 S.E.2d 748 and in Redman Development Corp. v. West, 127 Ga.App. 265, 266, 193 S.E.2d 213 where there were misstatements of the correct measure of damages, as is pointed out in 25 Mer.L.Rev. 97, 108, though the correct result was reached. Insofar as the statement of the measure of damages in these cases (Herrman, Robertson and Redman) as being the difference in the contract price and the cost to complete the work, plus sums expended by the contractor up to the time of the alleged breach, conflicts with the measure which we here declare as a correct one, it is expressly overruled and will not be followed.

2. In the instant case the evidence shows that the contract price was $52,300, and that defendant has paid Crankshaw $37,113.25 on the contract. The measure of damages is not in dispute, but it is defendant's contention that Crankshaw's testimony as to the amount it would have cost him to complete the job was so uncertain that the amount of damages could not be determined with reasonable certainty.

We disagree. Mr. Crankshaw testified: 'Q. Mr. Crankshaw, could you tell the court and jury how much it would have cost you in labor and material to have completed this job? A. Approximately $4200.00. Q. All right. How do you arrive at this figure, Mr. Crankshaw? A. I pay so much a unit and so much for material. That's based on other buildings (in the project), Buildings 1 and 2, which were identical buildings-and nine; Buildings 1, 2 and 9, which were identical buildings to 10. Q. In other words, for $4200.00 you could have completed the whole job? A. I could have completed the whole job, I believe, for $4200.00.'

We do not view this testimony as so uncertain as to warrant the direction of a verdict in defendant's favor. Though there should not be reliance upon speculation and conjecture and the proof should be made with all possible specificity, it has been held in countless cases that reasonable certainty is all that is required. Compare Bennett v. Associated Food Stores, Inc., 118 Ga.App. 711, 165 S.E.2d 581; Atlantic & B.R. Co. v. Howard Supply Co., 125 Ga. 478, 54 S.E. 530; Contractors Equipment Co. v. Essex Crane Rental Corp., 121 Ga.App. 184, 173 S.E.2d 270.

Of course the verdict or judgment may not be based upon speculation or conjecture, and thus the evidence must be such as to afford a fair basis for calculating the damages. National Refrigerator etc. Co. v. Parmalee, 9 Ga.App. 725(1), 72 S.E. 191; Studebaker Corp. v. Nail, 82 Ga.App. 779, 62 S.E.2d 198. As was pointed out in these cases, however, it is not required that exact figures be afforded for the calculation. We find the proof as a whole here to measure up to the required standard and the matter should have been submitted to the jury.

Judgment reversed.

BELL, C.J., PANNELL, P.J., and QUILLIAN, CLARK, STOLZ and WEBB, JJ., concur.

EVANS, J., concurs specially.

DEEN, J., dissents.

EVANS, Judge (concurring specially).

The trial court directed a verdict for the defendant. I concur with the majority opinion in holding such to be reversible error. The case should have been submitted to the jury.

It is contended that the evidence did not show recoverable damages, or did not fit within the framework of the measure of damages authorized by law in cases of this kind. I disagree.

What is the measure of damages where a building contractor begins performance of the work, and the owner, without lawful excuse, stops him and prevents his completion of the job? Much legal jargon, and mystifying and mysterious language has been used in certain prior decisions of this court, which can only confuse this issue.

When it is boiled down to simplicity, the measure of damages is the profit the builder would have made if he had been allowed to complete the job. Or, as has been held time and again, in slightly more complex language; but meaning the same thing: In Southern etc. Corp. v. Davis etc. Engineers, 109 Ga.App. 191, at 197-198, 135 S.E.2d 454, at 459: 'The measure alleged here is the difference between the total cost of the work under the contract and what the cost of performance would have been to plaintiff. Under the Georgia cases, this is the proper measure. Wallace v. Tumlin, 42 Ga. 462(4); Jones v. Ely, 95 Ga.App. 4(3), 96 S.E.2d 536; Luckie v. Max Wright, Inc., 90 Ga.App. 243(3), 82 S.E.2d 660,...