Grady v. S. E. Gustafson Const. Co., 49970

• Decision Date: 14 June 1960
• Docket Number: No. 49970,49970
• Citation: 251 Iowa 1242,103 N.W.2d 737
• Parties: William C. GRADY, d/b/a Grady Construction Company, Appellee, v. S. E. GUSTAFSON CONSTRUCTION COMPANY; Iowa State Highway Commission; and Travelers Indemnity Company, Appellants.
• Court: Iowa Supreme Court

Page 737

103 N.W.2d 737

251 Iowa 1242

William C. GRADY, d/b/a Grady Construction Company, Appellee, v. S. E. GUSTAFSON CONSTRUCTION COMPANY; Iowa State Highway Commission; and Travelers Indemnity Company, Appellants.

No. 49970.

Supreme Court of Iowa.

June 14, 1960.

Rehearing Denied Aug. 2, 1960.

Herrick & Langdon, Des Moines, and Dillon S. Turney, Fairfield, for appellants.

Kindig, Beebe & McCluhan, Sioux City, and Don C. Swanson, Des Moines, for appellee.

THORNTON, Justice.

At the outset it should be mentioned the trial and disposition of this case would have been facilitated by the use of pretrial procedure provided for in Division VI, rules 135 to 139, both inclusive, of the Rules of Civil Procedure, 58 I.C.A.

Plaintiff, a subcontractor, brings this action in equity under the provisions of section 573.16, Code of Iowa 1958, I.C.A., against the contractor, its surety and the Highway Commission. The contractor will be referred to herein as the sole defendant. Plaintiff's action is based on a claimed balance due under the terms of a written contract and a series of oral contracts between plaintiff and defendant for the performance of work and labor by plaintiff, a subcontractor, on the Interstate Highway project north of Des Moines. Defendant, the ocntractor, holds the prime contract with the Highway Commission. Plaintiff filed his claim with the Highway Commission pursuant to chapter 573 of the Code in the sum of $52,359.42, and brought this action for $53,172.34 and for attorney fees under section 573.21. The trial court allowed plaintiff's claim in the sum of $15,488.42 and taxed an attorney fee of $1,500. Defendant appeals and plaintiff cross-appeals.

There is no question raised as to performance of the work or that oral contracts were entered into. The parties agree defendant has paid plaintiff $198,530.69 for work performed on the project, and defendant admits in its pleadings, there is $8,419.79 still due plaintiff.

I. Defendant contends the action is premature and plaintiff is not entitled to his money until defendant receives the balance due it from the Highway Commission. The contract provides, 90% of all work will be paid when accomplished and within three days of receipt of estimates from the Highway Commission and is in part as follows:

'* * * except the final payment, which said Contractor shall pay to said Sub-contractor in full within three (3) days after final acceptance of the project and payment of the final estimate by the Iowa State Highway Commission.'

Its contention is the payment of the final estimate by the Commission is a condition precedent to the maintenance of the action. If that is the law defendant can prevent recovery by plaintiff forever. The facts in this case demonstrate such condition is not in the control of plaintiff. Plaintiff filed his claim with the Commission and under the provisions of section 573.14, Code of Iowa 1958, I.C.A., could hold up payment by the Commission to defendant of double the amount of the claim. It is not urged the Commission has not accepted the project. John T. Pearson, resident engineer of the Commission in charge of the project, called by defendant, testifies:

'We were holding funds due Gustafson Construction Company, but the filing of the claim by the Grady Construction Company has nothing to do with it. It was being held because of a claim Gustafson has against the Highway Commission which is separate from this case.'

'If we pay Mr. Gustafson this $111,000, it would mean that he would have accepted his final estimate and had no further claim against the Highway Commission, therefore, he has not signed the final estimate and will not.'

Defendant in no way offered to explain its failure to sign the final estimate. The evidence shows plaintiff completed his work for defendant September 4, 1958, filed his claim December 6, 1958, and this action January 12, 1959. Under the provisions of the written contract, (and the dealings of the parties show the oral contracts were handled the same) defendant was to cross-section the areas from which plaintiff excavated to determine the cubic yards hauled by plaintiff, and under the dealings of the parties plaintiff was to furnish a load count for the basis of estimate by the Commission to make payment during the progress of the work. A proper interpretation of the contract and dealings of the parties requires each to do so in a reasonable time. In all events it is the intention of the parties here the final payment is an absolute debt of defendant. Provisions similar to the one here have been held valid and enforceable, but where the contractor has by his own fault lost the right to payment the subcontractor is entitled to his compensation. 17 C.J.S. Contracts § 502(2)(d), p. 1058. Here defendant has not lost his right to payment from the Commission, but because of other matters with the Commission is voluntarily delaying final payment. Under such circumstances plaintiff is entitled to his compensation and a cause of action accrues in his favor within a reasonable time. As supporting this view see, 12 Am.Jur. Contracts, § 329, p. 885; § 381, pp. 957-958; §§ 300-301, pp. 855-857; 17 C.J.S. Contracts § 502(2)(d), p. 1058; and McDermott v. Mahoney, 139 Iowa 292, 115 N.W. 32, 116 N.W. 788. Here plaintiff did not act with unreasonable haste under the circumstances, he was entitled to have the matter judicially determined on the date action was commenced.

II. The issue between the parties is, how many yards of earth did plaintiff excavate pursuant to the contracts? The question is purely one of fact, the burden is on plaintiff to prove the number of cubic yards hauled by a preponderance of the evidence. On this appeal we consider the case de novo and in such cases we give weight to the findings of the trial court but we do not abdicate our function as triers of fact. Snater v. Walters, 250 Iowa 1189, 98 N.W.2d 302; and Warren County v. Elmore, 250 Iowa 348, 93 N.W.2d 756.

To sustain his burden of proof by a prepondence of the evidence plaintiff must offer evidence in support of his claim, which when fully and fairly considered produces the stronger impression and be more convincing when weighed against the evidence introduced in opposition thereto. See Instruction No. 9, Uniform Instructions Proposed by the Special Committee on Uniform Court Instructions of the Iowa State Bar Association.

The contract provides, '* * * Contractor will cross-section Channel and Borrow and pay Sub-Contractor for actual cubic yards excavated.' And plaintiff as a witness conceded the cubic yards excavated to be determined by cross-sectioning. The contract places this duty on the contractor and requires him to pay plaintiff for actual cubic yards excavated. The contract does not exclude other methods of computation where the cross-sectioning has not been done, or is incomplete or inaccurate. Our duty is to determine from the evidence the actual yards excavated and plaintiff should be paid for such amount. John T. Pearson, the resident engineer, testifies cross-section quantities give the most accurate feasible answer and that the load count is quite inaccurate. Where the cross-sectioning has been accurately done we will use such to determine the yards excavated.

Plaintiff bases his proof on load count kept by him or his employees as the loads of dirt were excavated and hauled to the roadway to be filled. He does not have daily records for work performed prior to May 6, 1958. For work performed from December 9, 1957, to May 6, 1958, plaintiff relies on his lump sums of load counts as shown in his book Exhibit I, and Exhibits D-1 through D-12, letters from defendant to plaintiff enclosing a check in each instance for payment of work estimated to have been performed to a date specified in each exhibit. These estimates were made by the Highway Commission from a load count furnished by plaintiff.

III. Plaintiff contends defendant's cross-sectioning based on field notes of the Highway Commission, Exhibits 9, 10, 11 and 19, should be rejected because the field notes are inadmissible. The evidence fairly shows the field notes were prepared by employees of the Highway Commission as a part of the work on the project and such are kept by the Commission as a part of its records of the project and are open to the public. They are admissible as public records. Wigmore's Code of Evidence, 3rd Edition, Rules 161, 162 and 163; and State v. Sonderleiter, 251 Iowa ----, 99 N.W.2d 393, 394, and citations.

Cross-sectioning is a method of detemining the amount of dirt to be excavated from the 'cut,' place from which the earth is removed, by taking the elevations of the land before and after the excavation. The results of the elevations, field notes, are plotted on graph paper and the amount excavated mathematically determined. The fill, the place where the earth is deposited, may also be cross-sectioned and the cubic yards of earth thus determined.

Plans quantities is the amount of earth determined by the Highway Commission to be necessary to complete the project and is determined similar to cross-sectioning. This method is often used by the Commission and prime contractor in arriving at the amount excavated as it is not necessary to complete the second elevations after the project is completed and speeds up the date of settlement.

IV. At the close of the trial there were seven areas of disagreement between the parties. We will deal with each separately, staring with the areas not cross-sectioned.

Relative to the finish work west of Merle Hay plaintiff testifies he performed the work at the instance of L. L. Nady, president of defendant corporation, his load count for the area is 967 loads and multiplied by 15 cubic yards per load equaled 14,505 cubic yards of finish work in this area. L. L. Nady testifies defendant settled with the Highway Commission for this work as clearing and grubbing of 9,918 cubic yards. He states he...