Gould v. McCormick

• Citation: 134 P. 676,75 Wash. 61
• Court: Washington Supreme Court
• Decision Date: 19 August 1913
• Parties: GOULD et al. v. McCORMICK et ux.

134 P. 676

75 Wash. 61

GOULD et al. v. McCORMICK et ux.

Supreme Court of Washington

August 19, 1913

Department 2. Appeal from Superior Court, King County; Ralph Kauffman Judge.

Action by A. W. Gould and another against R. C. McCormick and wife. Judgment for plaintiffs, and defendants appeal. Affirmed.

John W Roberts, of Seattle, for appellants.

Peters & Powell, of Seattle, for respondents.

MAIN J.

This is an action upon a contract. The plaintiffs are copartners doing business under the firm name of Gould & Champney. The defendants are husband and wife. On August 4, 1909, the plaintiffs entered into a written contract with the defendant Robert McCormick, wherein it was provided that the plaintiffs were to draw plans and specifications for a nine-story building which McCormick desired to construct upon lots 1 and 2, block 28, Maynard's addition to the city of Seattle. The contract, so far as material, was as follows:

'Second party (respondents) also agrees to take charge of and supervise the construction of the building and to faithfully superintend the same to the end that the construction may be strictly in accordance with said plans and specifications and pursued in accordance with good workmanship, and only the best materials of the several kinds specified employed or used in such construction. And the second party agrees to devote whatever time that may be necessary, and to employ at their own expense whatever assistance that may be necessary to fully superintend the construction of said building to the entire satisfaction of the first party (appellant, R. C. McCormick). Should the first party desire a clerk of the works, then such clerk or superintendent shall be at his expense.

'The second party further agrees from time to time to supplement said plans to such additional drawings as may be necessary to interpret and fully exemplify the work, and shall be ready at all times to interpret and explain said plans and specifications or any part thereof, and shall do all work that may be necessary to reconcile any apparent confliction, and will make such additional drawings and provide such additional specifications as first party may from time to time require, to the end that said work may be constructed in the best possible manner, economically and to the satisfaction of the first party.'

For providing the plans and specifications and superintending the construction of the building the plaintiffs were to receive 5 per cent. of the cost thereof. Under the agreement, plans and specifications for a hotel building were prepared. The erection of the building was begun. Thereafter, and on August 18, 1910, when the building was about one-third completed, McCormick discharged the plaintiffs from further service under the contract. Subsequently the building was completed by the appellants without employing other architects. On or about December 23, 1910, this action was begun for the purpose of recovering the balance due the plaintiffs on the contract, establishing and foreclosing a lien for the same, and for an attorney's fee. The cause was tried to the court without a jury. During the trial it was stipulated, in the event the court should enter a judgment foreclosing the lien, that it should fix the amount of the attorney's fee to be allowed the plaintiffs. At the conclusion of the trial the court took the matter of the decision under advisement. On October 18, 1911, the trial court caused to be filed in the case a memorandum decision. In this decision the court found: 'In the above-entitled cause I find that there is no evidence of any acts or omissions on the part of the plaintiffs which justified their dismissal from the defendants' service, or which would justify a reasonable man to suspect them of wrongdoing or incompetency. I find, moreover, that the fair cost of the structure which they were engaged to work upon, and upon which their commissions are to be paid, is $325,000. I find that there is no evidence which enables me to segregate the value of that part of the work done at the time of their dismissal from that part which they were bound to do in order to fulfill all of their obligations under their contract of employment. In such a case a true measure of damages is the whole sum agreed to be paid for the completed work. * * * Plaintiffs admit, however, that the completion of the contract would involve an outlay by them of $1,500, and I think this should be deducted from their whole compensation. On this basis plaintiffs would be entitled to recover 5 per cent. of $325,000, or $16,250, less $1,500 outlay and $8,000, already paid, is $6,750, for which amount, with interest and an attorney's fee of $1,500, the plaintiffs are entitled to a lien upon the realty described in the complaint.' Thereafter, and on November 24, 1911, judgment was entered in favor of the plaintiffs for 7,239.37, and in addition thereto an attorney's fee in the sum of $1,500. The defendants appeal.

The questions which are chiefly material are: (1) Did the memorandum decision constitute findings of fact? (2) Construction of the contract as to the right to terminate. (3) Were there reasonable grounds for dissatisfaction? (4) The measure of damages.

(5) Does a right of lien exist? (6) Was the notice of claim of lien valid?

I. On October 18, 1911, the trial judge caused to be filed in the cause a memorandum decision, a portion of which is above set out. To this, through inadvertence, the appellant filed exceptions as though it were findings of fact and conclusions of law. The exceptions, however, were subsequently withdrawn. No findings of fact and conclusions of law were signed and filed, unless the memorandum decision can be considered as such. It is argued that the memorandum decision constitutes findings of fact and conclusions of law, and, inasmuch as there are no exceptions thereto, there is nothing for the court to consider. But under the rule as stated in the case of Gust v. Gust, 70 Wash. 695, 127 P. 292, the memorandum decision cannot be considered as findings of fact and conclusions of law. In that case, speaking of a memorandum decision, it was said: 'It is apparent, we think, that the entry of March 29th was in no sense a judgment, nor intended as such. It was nothing more than the decision or ruling of the court upon the matters taken under advisement.'

II. It is urged that by the terms of the contract there was reserved to the appellants the right to terminate the services of respondents whenever they might be dissatisfied, providing the dissatisfaction was not in bad faith. In other words, that there was preserved to the appellants an unqualified option to terminate the contract whenever in fact they became dissatisfied, regardless of whether or not there was any reasonable ground for such dissatisfaction. By examination of the contract it will be seen that the building was to be constructed: (1) Strictly in accordance with the plans and specifications; (2) with good workmanship; (3) with the best of materials; (4) that its construction was to be superintended to the entire satisfaction of the appellants; and (5) that such additional drawings and specifications as might be required from time to time were to be prepared by the respondents, to the end that the work might be constructed in the best possible manner, economically, and to the satisfaction of the first party. These provisions specify the character of the workmanship, the character of the material, the character of the superintendence, and in addition, that the building be constructed in the best possible manner, economically, and to the satisfaction of the appellants. Where from the language of the contract it is doubtful whether the parties intended that one party thereto should have the unqualified option to terminate it in case of dissatisfaction, or whether the intention was to give the right to terminate only in the event of dissatisfaction based upon some reasonable ground, the contract will be construed as not reposing in one of the parties the arbitrary or unqualified option to terminate it. In other words, in cases of doubt, the contract will be construed as giving the right to terminate only when there is a reasonable ground for dissatisfaction.

In Hawkins v. Graham, 149 Mass. 284, 21 N.E. 312, 14 Am. St. Rep. 422, speaking of a contract of the same general character as the one here under consideration, it was said: 'In doubtful cases courts have been inclined to construe agreements of this class as agreements to do the thing in such a way as reasonably ought to satisfy the defendant.' Where the contract provides that the work or material shall be of a specified character and to the satisfaction of one of the parties, the right to terminate exists only when there is dissatisfaction and the same is based upon reasonable grounds.

In Doll v. Noble, 116 N.Y. 230, 22 N.E. 406, 5 L. R. A 554, 15 Am. St. Rep. 398, the court was considering a contract for polishing, staining, and rubbing the woodwork of two houses. The contract provided that the work was to be done 'in the best workmanlike manner under the supervision of William Packard, superintendent, and to the entire satisfaction of William Noble, the party of the first part, owner.' The trial court, in submitting the cause to the jury, instructed them in effect that, while the contract provided it was to be done to the owner's satisfaction, that clause must be regarded as qualified by the other provisions of the contract that it was to be done in the best workmanlike manner, and that was the test of a correct and full...