East Tennessee, V. & G. Ry. Co. v. Central Lumber & Mfg. Co.

• Decision Date: 09 November 1895
• Citation: 32 S.W. 635,95 Tenn. 538
• Parties: EAST TENNESSEE, V. & G. RY. CO. v. CENTRAL LUMBER MANUF'G CO. et al.
• Court: Tennessee Supreme Court

32 S.W. 635

95 Tenn. 538

EAST TENNESSEE, V. & G. RY. CO. v. CENTRAL LUMBER MANUF'G CO. et al.

Supreme Court of Tennessee.

November 9, 1895

Appeal from chancery court, Greene county; John P. Smith, Judge.

Bill by the East Tennessee, Virginia & Georgia Railway Company against the Central Lumber Manufacturing Company and sureties on their construction indemnity bond. From a decree for plaintiff, defendants appeal. Affirmed.

Susong & Susong, for appellants.

Wilson & Piper, for appellee.

CADWELL Special Judge.

This is a bill filed by the East Tennessee, Virginia & Georgia Railway Company against the Central Lumber & Manufacturing Company of Greenville, Tenn., and the sureties of the last-named company on an indemnity bond. On the 21st August 1891, the East Tennessee, Virginia & Georgia Railway Company entered into a contract with the Central Lumber & Manufacturing Company, by which the lumber company undertook to build for the railway company a brick depot at Greenville Tenn. The building was to be constructed according to specifications agreed on, and at a cost of $6,250, including the clearing of the ground. The lumber company gave bond in the penalty of $4,000, conditioned to save the railway company harmless from all liens and expenses incident to liens, and from all damages resulting from its default, and J. N. Harris, M. P. Reeve, A. W. Kelly, and Isaac O. Harrell became the sureties on this bond. The building was erected and, pending the construction, payments aggregating $4,760 were made by the railway company. The sum of $139.88 was allowed for extra work, bringing the contract price up to $6,399.88. There was thus left to the credit of the lumber company in April, 1892, the sum of $1,629.88. Lien claims were asserted by various persons, and were paid by the railway company, to the amount of $1,951.96, being an overpayment by the complainant of $322.08. To recover that amount, with interest, this bill is brought by the railway company against the lumber company and the sureties on the indemnity bond, except J. N. Harris, who appears to have left the state.

It appears by stipulation of counsel that the amount of lien claims paid by the railway company is as stated above, and it is further agreed that the bill be treated as the bill of the receivers of the railway company. The defendants answer jointly, and admit the execution of the contract, and the identity of the original instrument which is filed with this bill. But they deny that anything is due complainant, and claim that, upon a fair estimate, the balance is in their favor. They aver-and such is the fact-that the depot was to be built upon the site of a former depot which had been burned; that the foundations of the former structure, or a part of them, were to be used for the new one, and that, much of the material of the old foundations providing to be unfit for the purpose, defendants furnished new bricks for foundations at their own cost, and did other small items of extra work, and did not consult the railway company's engineer before doing this, because they were afraid of forfeiting compensation under the contract, by delay. For this, defendants say, no proper credit has been allowed, and that, if such credits were allowed, the railway company would be the debtor. The amount of credit claimed on this account is not stated in the answer.

The contract requires the defendant company to build, for the price specified, a brick passenger depot, to provide all material, supplies, equipment, etc., and do all the work, of every kind, character, and description, intended, called for and designed and required, in, by and under the plans, drawings, and specifications. It was expressly stipulated that the defendant company was to make alterations and variations as the railway company desired, and the following additional agreement on this point was made, viz.: "All allowances and differences hereunder on account of such work must be agreed and settled upon before the same is begun; otherwise, the chief engineer of the East Tennessee, Virginia & Georgia Railway Company shall have the sole and absolute right and authority, and the same is hereby given, to fix and determine the amount of such allowance of differences, if any." The cost of this extra work upon the foundations and elsewhere was not agreed upon nor settled before it was done, although it was ordered by the assistant engineer in charge, and the amount to be allowed for it was fixed by D. W. Lum, the chief engineer of the railway company, at $139.88, as above stated. The engineer says that his estimate is based on actual measurement. By...