A. J. Wolfe Co. v. Baltimore Contractors, Inc.

• Decision Date: 07 February 1969
• Citation: 355 Mass. 361,244 N.E.2d 717
• Parties: A. J. WOLFE COMPANY v. BALTIMORE CONTRACTORS, INC., et al. 1
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 717

244 N.E.2d 717

355 Mass. 361

A. J. WOLFE COMPANY v. BALTIMORE CONTRACTORS, INC., et al. ¹

Supreme Judicial Court of Massachusetts, Suffolk.

Argued Dec. 4, 1968.

Decided Feb. 7, 1969.

Joseph H. Elcock, Jr., Boston, for defendants.

Jerrold A. Olanoff, Boston (Sally A. Corwin, Boston, with him), for plaintiff.

Before WILKINS, C.J., and CUTTER, KIRK, SPIEGEL and REARDON, JJ.

CUTTER, Justice.

A subcontractor for electrical work (Wolfe) on a Cambridge apartment house owned by Frederick and Thomas Dupree (the owners) seeks, in an action at law, to recover from the general contractor (Baltimore) for amounts due under the subcontract and for extras and, by a bill in equity, to each and apply a bond given by The Aetna Casualty and Surety Company (Aetna). The law action and the bill in equity were consolidated for trial and, after trial, the trial judge ordered that they be 'fused into a single proceeding,' i.e. the bill in equity.

The trial judge made somewhat summary findings which he later adopted as a report of material facts. Baltimore and Aetna appealed from the order of fusion and from what appears to be only an order including a form of final decree (a) awarding Wolfe $39,576.23 plus interest and costs, and (b) stating that, if Baltimore does not pay Wolfe in full, then Wolfe may resort to Aetna's bond for payment. The evidence is reported. The parties have treated the order as embodying a final decree. We do so also, although appropriately a final decree should have been prepared by counsel and entered on the docket by the clerk. Rule 82 of the Superior Court (1954). See Bressler v. Averbuck, 322 Mass. 139, 143, 76 N.E.2d 146; Nantucket Express Lines, Inc. v. Woods Hole, Martha's Vineyard & Nantucket S. S. Authy., 350 Mass. 173, 174, 213 N.E.2d 862.

The action at law was commenced in the Superior Court for Suffolk County against Baltimore by writ dated December 6, 1965. It sought recovery of $39,576.23 alleged to be due under the subcontract. Baltimore's answer included (in addition to a general denial) an allegation of breaches of the subcontract by Wolfe, references to certain terms of the subcontract (see fn. 7 and related text of this opinion), and averments that the owners had not made final payment to Baltimore and that a dispute had arisen between Baltimore and the owners concerning Wolfe's work.

On February 13, 1967, Wolfe, in the action at law, by special precept purported to attach funds to the value of $44,000 owed to Baltimore by the owners both of whom were alleged to be of Cambridge (which is in Middlesex County). Baltimore filed a motion to dismiss the special precept on the ground that neither owner, served as trustee, dwelt or had a place of business in Suffolk County. See G.L. c. 246, § 2; Daniels v. Clarke, 193 Mass. 84, 85, 78 N.E. 751. ²

On April 14, 1967, Wolfe filed against Baltimore and Aetna ³ a bill to reach and apply certain assets of Baltimore. The bill also sought to have determined the amount, with interest, owed by Baltimore to Wolfe. It was alleged (a) that Wolfe had performed its work under its subcontract with Baltimore; (b) that Baltimore and the owners had submitted all disputes to arbitration, with the consequence that an award in favor of Baltimore had been paid in full; and (c) that, in order to obtain full payment of the award, Baltimore, with Aetna as surety, had furnished to the owners a bond in the penal sum of $44,000 naming Wolfe as obligee and guaranteeing 'the payment of any judgment in favor of Wolfe against Baltimore.' The defendants were enjoined from cancelling or dealing with the bond. The owners were ordered to deliver the bond to the court. This was done.

The bond, entitled 'Bond to Dissolve Trustee Attachment,' bears the file number of the equity suit. It recites the service of the special precept and that Baltimore by giving bond, desires to 'dissolve * * * (the) trustee attachment.' ⁴

The trial judge found (a) that Wolfe had 'fully * * * performed all * * * services and furnished all * * * labor and materials * * * (under) its subcontract' and that Baltimore owes Wolfe $9,348.70 on the subcontract; (b) that for change orders and extras, Baltimore owes Wolfe $30,227.53; (c) that Wolfe had paid the owners $500 and received a release from them on account of 'minor and unintentional deviations' in Wolfe's performance; (d) that Wolfe is entitled to interest on the sums and from the dates listed in the margin; ⁵ and (e) that Aetna, on March 17, 1967, executed the $44,000 bond. The judge ruled that the bond required Aetna to pay to Wolfe any judgment against Baltimore (to the amount of the bond) if Baltimore fails to do so.

Baltimore and Aetna defend on two principal grounds: (a) that the evidence does not justify the finding that Baltimore was under liability to Wolfe, because (in effect) Wolfe did not produce evidence that the owners ever paid Baltimore amounts due to Baltimore for the several classes of work ⁶ done by Wolfe; and (b) that despite the fusion of the law action with the equity proceeding, the judge erred in concluding that Wolfe may resort to Aetna's bond.

1. Article II(a) of the subcontract provides that payment will be made on monthly requisitions for progress payments 'within 10 days after * * * (the owners') payment of such monthly progress payments * * * (has) been received by' Baltimore. ⁷ Baltimore contends that its receipt of these payments from the owners is a condition precedent to any payment to Wolfe (of amounts requisitioned) and that Wolfe in order to recover must establish that Baltimore has been paid.

We interpret art. II(a) merely as setting the time of payment and not as creating a condition precedent to payment. In the absence of a clear provision that payment to the subcontractor is to be directly contingent upon the receipt by the general contractor of payment from the owner, such a provision should be viewed only as postponing payment by the general contractor for a reasonable time after requisition (and completion of the subcontractor's work mentioned in the requisition) so as to afford the general contractor an opportunity to obtain funds from the owner. See Thos. J. Dyer Co. v. Bishop Intl. Eng. Co., 303 F.2d 655, 659--661 (6th Cir.); Byler v. Great Am. Ins. Co., 395 F.2d 273, 276--277 (10th Cir.). See also Trinity Universal Ins. Co. v. Smithwick, 222 F.2d 16, 22--23 (8th Cir.) cert. den. 350 U.S. 837, 76 S.Ct. 74, 100 L.Ed. 747; Dancy v. William J. Howard, Inc., 297 F.2d 686, 688--689 (7th Cir.); Carrell T. Stuart Contractor of Ariz. v. J. A. Bridges & Rust-Proofing, Inc., 2 Ariz.App. 63, 65, 406 P.2d 413; Mignot v. Parkhill, 237 Or. 450, 457--461, 391 P.2d 755. ⁸ Cf. Mascioni v. I. B. Miller, Inc., 261 N.Y. 1, 4--6, 184 N.E. 473 (parol evidence received to explain intention of parties as imposing a condition and not merely setting time for payment); Nassau Suffolk Lumber & Supply Corp. v. Bruce, 177 Misc. 825, 828, 31 N.Y.S.2d 906 (County Court), mod. 265 App.Div. 879, 38 N.Y.S.2d 73.

Although no Massachusetts case directly controls the present situation, our decisions, in somewhat comparable situations, generally support our interpretation. See E. Van Noorden Co. v. Hartford Roofing & Sheet Metal Co., Inc., 336 Mass. 676, 678, 147 N.E.2d 749, citing Alvord v. Cook, 174 Mass. 120, 124--125, 54 N.E. 499; Rosenthal v. Schwatz, 214 Mass. 371, 373, 101 N.E. 1070, and Canton v. Thomas, 264 Mass. 457, 459, 162 N.E. 769, three cases dealing with the date when a brokerage commission is due under an agreement that commission will be payable when 'papers are passed' or the agreement 'is carried into effect.' See also C. J. Hogan, Inc. v. Atlantic Corp., 332 Mass. 322, 328--329, 124 N.E.2d 905. In the Canton case, 264 Mass. 459, 162 N.E. at 769 it was stated that a 'condition of the payment * * * would be expressed if the words 'if and when papers are passed' had been used * * * in place of the words 'when papers are passed. " Cf. Smith v. Graham Refrigeration Prod. Co., Inc., 333 Mass. 181, 184--186, 129 N.E.2d 884 (express condition that payment not to take place until defendant's financial condition warrants).

The trial judge (see fn. 5) found that Wolfe was entitled to $18,353.48, the balance due on monthly requisitions, on October 26, 1965, the date when Wolfe demanded final payment. There was evidence of monthly requisitions (including requisitions for extra work) in June, July, and August, 1965, still remaining unpaid, in an amount in excess of $18,353.48. The principal (if not the only) definitive statement of a claim by the owners that any of Wolfe's work was not properly done appeared in a letter from Baltimore to Wolfe dated February 25, 1966. This letter referred to Baltimore's disputes with the owners (and the pending arbitration of them) apparently as delaying release of final payments. Disputes involving Wolfe's work represented only a minor portion ⁹ of what remained payable by Baltimore to Wolfe for work done by Wolfe. We cannot say that the trial judge improperly treated the date of the demand for final payment as a reasonable time for making the progress payments when no complaints of deficiencies in Wolfe's work had theretofore been received from the owners. Also far more than adequate amounts were being retained by Baltimore or the owners to meet all reasonably to be anticipated defiencies in Wolfe's work.

2. The trial judge found that $17,751.75 was due on January 24, 1966 (ninety days after Wolfe's demand for final payment on October 26, 1965), as a final payment for that part of Wolfe's work concerning which there was no dispute between Baltimore and the owners. A rider ¹⁰ to art. II(a) of the contract provided that if final payment to Baltimore is withheld because of a dispute beteen Baltimore and the owners 'which in no way involves * * * (Wolfe's) work * * * then the balance * * * shall be paid * * * within 90 days after demand.' Wolfe's final payment was to...