Keystone Engineering Corp. v. Sutter, 59

• Citation: 196 Md. 620,78 A.2d 191
• Decision Date: 10 January 1951
• Docket Number: No. 59,59
• Parties: KEYSTONE ENGINEERING CORP. v. SUTTER.
• Court: Court of Appeals of Maryland

Page 620

196 Md. 620

78 A.2d 191

KEYSTONE ENGINEERING CORP. v. SUTTER.

No. 59.

Court of Appeals of Maryland.

Jan. 10, 1951.

William Dunbar Gould, Chestertown, and Irving B. Grandberg, Baltimore, for appellant.

William B. Somerville and Roszel C. Thomsen, both of Baltimore (Clark, Thomsen & Smith, Baltimore, and S. Scott Beck, Jr., Chestertown, on the brief), for appellee.

Before MARBURY, Chief Judge, and DELAPLAINE, COLLINS, GRASON, HENDERSON and MARKELL, JJ.

MARBURY, Chief Judge.

The appellee, Sutter, was the general contractor engaged in the erection of a high school at Prince Frederick, Maryland. He had two subcontracts with the appellant Keystone Engineering Corporation to furnish electric wiring, etc., in the high school in accordance with the plans and specifications prepared by the architect, for the total sum of $26,590. The work and materials had to meet the requirements of the specifications, and the subcontractor agreed to be bound to the general contractor by all terms and conditions by which the general contractor was bound to the owner. One of the provisions in the contract of the general contractor with the owner was that if the contractor should persistently or repeatedly refuse or should fail to supply enough properly skilled workmen or proper materials, or should otherwise be guilty of a substantial violation of any provision of the contract, the owner, upon the certificate of the architect that sufficient cause existed to justify such action, might without prejudice to any other right or remedy, and after giving the contractor seven days written notice, terminate the employment of the contractor, take possession of all the materials, tools and appliances, and finish the work by whatever method he might deem expedient. In such case, the contractor would not be entitled to receive any further payment until the work was finished, and then, if the expense of finishing the work should exceed any unpaid balance, the contractor should pay the difference to the owner. There was nothing in Sutter's contract with the owner, and nothing in Keystone's contract with Sutter with respect to the employment of union labor. Sutter employed some union and some non-union men, and Keystone employed only union men. Keystone's first contract was made on July 28, 1947, in the form of a purchase order, and there was another similar contract on April 29, 1948, for some additional work. Keystone started with the work and had apparently finished about 51% of it in July, 1948. The electrical work had to be done ahead of that of the bricklayers, but the job progressed without special difficulty untilJuly 6, 1948. Shortly before that date, a union organizer from Washington wanted to organize the laborers on the job. On July 6, the laborers did not show up, and on July 7, two or three pickets appeared. The Keystone men worked the first day they were there, but thereafter did not come to work. The bricklayers caught up with the electricians, and when Sutter's superintendent called Keystone's foreman to get some workmen on the job, he was told that they would not go through the picket line. This condition continued until Keystone wrote Sutter a letter on July 27 in which it stated: 'Please be advised that, due to conditions beyond our control, we are unable to proceed with our work due to your action in employing non-union mechanics.' Sutter replied to this letter on July 29, calling attention to the fact that there was no agreement between the parties as to the type of workmen employed, and requesting Keystone to proceed at once with the installation of the work. On the same day, Sutter engaged the Taylor Electric Company to proceed with the electrical work. Sutter and Taylor both say that this was a temporary arrangement in order to keep ahead of the bricklayers. Keystone's superintendent said that he was present at the time, and Sutter's men made a verbal agreement with Taylor to complete the job. On July 30, Keystone wrote Sutter stating: 'Due to labor trouble on the subject job you are placing obstacles in our path so that we are handicapped in our attempts to proceed with our work. We are ready, willing and able to prosecute our work, and have the necessary material, manpower and tools to do so, but cannot proceed until you remove the obstacles from our path.' It was testified by Keystone's witnesses that the obstacles were the pickets. The day before this letter, and the same day on which Keystone's foreman claims the permanent arrangement was made with Taylor, the architect wrote Sutter complaining of the lack of progress on the building and stated: 'I understand your electrical contractor is not on the job. May I suggest that if they refuse to return within a reasonable time, that you terminate your contract with Keystone and finish the job with another contractor.' On August 2, Sutter gave Keystone written notice, stated to be in accordance with the provisions of the general contract which we have quoted above, that unless Keystone had men at work by August 9, its contract would be terminated and all payments would be handled in strict accordance with the general contract. This seven-day notice had no effect, and thereafter Taylor went ahead with the contract and completed the electrical work. The cost of such completion was in excess of the amount owing Keystone. Keystone sued Sutter in the Circuit Court for Kent County for breach of contract, claiming $33,677.22 damages. Sutter filed pleas and a counter-claim for $1000 for the excess of the cost of completion over the contract price. Testimony was heard before a jury, and, at the conclusion of the testimony,...