Joint Sch. Dist. No. 4 of Town & City of Platteville v. Bailey-Marsh Co.

• Decision Date: 18 June 1923
• Citation: 194 N.W. 171,181 Wis. 202
• Parties: JOINT SCHOOL DIST. NO. 4 OF TOWN AND CITY OF PLATTEVILLE v. BAILEY-MARSH CO. ET AL.
• Court: Wisconsin Supreme Court

181 Wis. 202

194 N.W. 171

JOINT SCHOOL DIST. NO. 4 OF TOWN AND CITY OF PLATTEVILLE

v.BAILEY-MARSH CO. ET AL.

Supreme Court of Wisconsin.

June 18, 1923.

Appeal from Circuit Court, Grant County; S. E. Smalley, Judge.

Action by Joint School District No. 4 of the Town and City of Platteville against the Bailey-Marsh Company and the New Amsterdam Casualty Company. From a judgment for plaintiff, defendants appeal. Affirmed as to the Bailey-Marsh Company, and modified and affirmed as to the Casualty Company.

Crownhart, J., dissenting.

On the 30th day of March, 1917, plaintiff entered into a contract with the defendant Bailey-Marsh Company (hereinafter called the company) whereby the company undertook to erect, finish, and deliver to plaintiff a solid brick, concrete, and stone high school building, according to certain plans, drawings, and specifications provided by the architects; the work to be done under the personal supervision of the architects, the company to furnish all labor, material, and equipment necessary to complete the building at the agreed price of $107,650. The contract did not cover heating, ventilating, plumbing, telephone system, clock system, heat regulation, and marble work in toilet and shower rooms. Payments were to be made as the work progressed upon the certificate of the architects. Shortly after the making of the contract, the company entered upon its performance, and the work progressed satisfactorily throughout the year 1917. Estimates for work done and material furnished during that period were prepared, architects' certificates issued, and estimates paid by the school board to the company. The last estimate was paid December 10th, and was for work done and material furnished during the month of November.

The method of transacting the business was as follows: Each month the company prepared an estimate, which was forwarded to the architects, and these estimates, with one exception, were approved by the architects and were intended to cover 90 per cent. of the value of the work done and material furnished during the period covered by the estimate. The estimates of February and March, 1918, were, at the request of the architects' superintendent, based upon the difference between what it would cost to complete the building and the amount of material and labor furnished, figuring a very liberal amount for completion, less 10 per cent. No estimate was presented for the month of December, as it appears that the estimate for November had resulted in a slight overpayment. On February 6, 1918, the company presented an estimate and requested a certificate allowing same for the sum of $2,011.25. On March 12, 1918, the company presented another estimate and requested a certificate allowing same for $4,724.90. This latter estimate was accompanied by a letter, in which the company stated that, unless estimates were promptly paid, they would not proceed further with the work. The school board was further notified that work would be suspended unless payment was made and repeated demands for payment were made by the company. On March 13, 1918, the architects wrote the company that nothing would be paid on the estimates of February 6th and March 12th for the reason there was nothing due under the contract, and stated that the labor and material included in the estimates had not been furnished within the requirements of the contract. On March 30th the company drew the fires from its boilers, discharged its men, locked the boiler room, and left the job.

The controversy in regard to February and March estimates related mainly to an item for millwork, which had been specially made up at a mill in Minneapolis, and which was then stored at Minneapolis; it being the claim of the architects that material stored in another state was not “furnished” within the meaning of that term as used in the contract. There was then a conference between the parties, but the company refused to resume work unless the estimates were paid. The school board then procured from the company the name of a plastering contractor and arranged with him to do the plastering. The school board also advised the company that if the company would give specific orders for items as required by the plaintiff, the latter would feel justified in hiring men and going on with the work. Specific orders were given at the request of the school board during the spring and summer of 1918. On April 23, 1918, the New Amsterdam Casualty Company (hereinafter called the casualty company) served upon the school board a notice, insisting upon fulfillment by the school board of all the terms of the contract and bond with reference to payments, claims of labor, and materials, etc., and notified the school board not to make further payments to the contractor or upon its order without the written consent and permission of the casualty company. No formalnotice of the abandonment by the company was ever served upon the school board by the casualty company. On August 17, 1918, at the request of the school board, the company gave the school board a blanket order and formal authority to proceed with the work, the same to be without prejudice to the rights of all parties concerned. After April 11, 1918, the school board paid out for completing the building the sum of $14,630.15, being $5,497.31 more than the contract price. Included in this sum, however, was an item of $5,000, paid by the school board to the First National Bank of Platteville. The facts in regard to this will be hereafter more fully stated.

On the 21st day of December, 1920, the plaintiff began this action against the company and the casualty company to recover the sum of $5,497.31, being the amount expended by it above the contract price as stated above and also demanded judgment for $3,410 as liquidated damages under the contract for failure of the company to complete the building on or before March 30, 1918. It was the claim of the company that it had not abandoned performance of the contract; that the plaintiff had breached its contract by failing and refusing to pay the estimates for labor performed and material furnished for the months of December, 1917, and January, February, and March, 1918. The defendant casualty company relied upon the defense of the Bailey-Marsh Company and alleged that by reason of the payment of the $5,000, by the school board to the First National Bank, a part of the fund applicable to the building was diverted and the surety released.

The court found the facts substantially as stated, found that the company had failed to perform its contract and to finish and deliver the building over to the plaintiff by March 30, 1918; that the plaintiff had fully performed all of the terms and conditions of the contract by it to be performed; and further found that the plaintiff had proceeded with due diligence to complete the building and had expended the sum of $5,592.31 in excess of the contract price (this included the $5,000 item before referred to); that the building was completed the early part of March, 1919.

The court further found:

“I find that on or about April 8, 1918, the defendant Bailey-Marsh Company gave to First National Bank of Platteville, Wis., an order authorizing and directing the plaintiff to pay said bank out of any money then due or to become due to said defendant (company) under said contract the sum of $5,000 in payment of money borrowed by said defendant from said bank on January 8, 1918, for the purpose of meeting the pay roll of said defendant on said contract and so used; that said order was accepted by the plaintiff, and thereafter said sum was paid said bank by plaintiff out of money due the defendant Bailey-Marsh Company under said contract prior to August 17, 1918.”

The plaintiff was awarded judgment for the sum of $5,592.31, being the amount paid for completion of the building in excess of the contract price, and the sum of $1,400 as liquidated damages. From the judgment so entered, the defendants appeal.

Gardner & Gardner, of Platteville, Olwell, Durant & Brady, of Milwaukee (James C. Melville, of Minneapolis, Minn., of counsel), for appellants.

Murphy & Murphy and Kopp & Brunckhorst, all of Platteville, for respondent.

ROSENBERRY, J. (after stating the facts as above).

The defendants earnestly contend that the plaintiff breached the contract by failing and refusing to pay the February and March, 1918, estimates; that part of the specifications material is as follows:

“Once in each and every month during the progress of the work the owners shall pay to the contractor a sum equal to 90 per cent. of the value of the work done and material furnished during the preceding month as assessed by the architects and the balance 30 days after the completion and acceptance of the building according to this specification.”

The question is, Was the material, which had been specially made up for this building and was then stored in Minneapolis, “furnished” within the meaning of the contract? In this connection the case of Smith v. Molleson, 148 N. Y. 241, 42 N. E. 669, is cited to our attention. The contest in that case was between the surety and the owner, and it was held that payments made by the owner on account of material which had been acquired in Nova Scotia, transported to Connecticut, there dressed and then transported to New York, where it was set in the building, was properly made, since all of the material on which payments were made had in fact gone into the building, although the payments were made prior to the time that the material had actually been incorporated into the structure, and does not apply here where the material was neither shipped nor incorporated into the building.

Tomlinson v. Ashland County, 170 Wis. 58, 173 N. W. 300, which holds that the architect has power to construe and define the intent and meaning of plans and specifications, does not authorize the architect to construe the contract itself, and is also...