Kline Clock & Suit Co. v. Morris

• Decision Date: 07 April 1922
• Docket Number: No. 21771.,21771.
• Citation: 293 Mo. 478,240 S.W. 96
• Court: Missouri Supreme Court
• Parties: KLINE CLOCK & SUIT CO. v. MORRIS et al.

240 S.W. 96

293 Mo. 478

KLINE CLOCK & SUIT CO. v. MORRIS et al.

No. 21771.

Supreme Court of Missouri, Division No. 2.

April 7, 1922.

Appeal from Circuit Court, Jackson County; Daniel E. Bird, Judge.

Action by the Kline Cloak & Suit Company against A. F. Morris and another. Judgment for plaintiff, and defendants appeal. Affirmed.

Guthrie, Conrad & Durham, J. Harold Olson, and Hale Houts, all of Kansas City, for appellants.

J. Sydney Salkey, of St. Louis, and J. C Rosenberger, of Kansas City, for respondent.

DAVID E. BLAIR, J.

The action is for damages upon a building contractor's bond. Judgment below was for plaintiff (respondent here) for the penalty of the bond, and execution thereon for the damages awarded. Defendants have appealed.

We will briefly outline the issues raised by the pleadings. The petition alleges the corporate capacity of plaintiff and of defendant Southwestern Surety Insurance Company; that on April 13, 1913, plaintiff and defendant Morris entered into a contract for the construction of a certain building and for the alteration and remodeling of another building in Kansas City, in accordance with certain plans and specifications made by designated architects at and for the price of $32,200, with additional compensation for extra work; that defendant Morris agreed to save and hold the plaintiff harmless of and from all loss, damages, or expense, including attorney's fees, arising from claims of laborers or materialmen in connection with the construction and alteration of said buildings, and to furnish bond for the faithful performance of said contract; that defendant Morris as principal and defendant Southwestern Surety Insurance Company as surety, on April 30, 1913, executed and delivered to the plaintiff a bond in the sum of $32,200, the condition thereof being that, if said defendant Morris should indemnify the plaintiff against any loss or damage directly arising by reason of his failure to perform said contract faithfully, said bond should be void, otherwise to remain in full force and effect; that plaintiff fully performed said contract on its part, and that defendant Morris failed to faithfully perform said contract in certain specific particulars, to wit, he did not save plaintiff harmless from loss, damages, and expense from claims of laborers and materialmen to plaintiff's damage in the sum of $8,813,34 and the additional sum of $2,500 attorney's fees, and did not complete the work on or before August 15, 1913, as specified in said contract, and not until September 15, 1913, all to plaintiff's damage in the sum of $3,100, as provided by said contract, and failed to keep a separate account of extra labor and material, as provided in said contract, to plaintiffs damage in the sum of $1,000. Plaintiff prayed judgment for penalty of the bond and for execution for damages in the sum of $15,413.34 and interest.

Defendant Morris admitted the execution of the contract, and alleged an additional provision therein that he was to be paid the sum of $100 for each day said buildings were completed before August 15, 1913, and that he was to receive a profit of 10 per cent. on the cost of all labor and material going into the extra work; that by mistake items of $2,892 for ornamental iron and $5,270 for lumber were omitted in making up the figures of his bid, and before entering upon said work, and while said defendant was still able to place the plaintiff in statu quo, defendant discovered such omission, and called the same to the attention of the plaintiff, and plaintiff agreed with said defendant that if he would proceed with the work under said contract plaintiff would make to defendant a reasonable allowance for the cost of installing said lumber and ornamental iron, and thereupon said defendant waived his right to rescind the contract; that thereafter said defendant proceeded with the performance of said contract, and did extra work of the reasonable value of $14,020.45, as per an itemized statement attached to his answer, and that plaintiff waived the keeping and furnishing to plaintiff of the separate account of such extra work; that had it not been for changes in plans and specifications made by the plaintiff after the execution of the contract and delays of other contractors and the doing of the extra work, the said defendant would have completed said contract 74½ days prior to August 15, 1913, and thereby the said defendant lost a bonus of $100 a day, and sustained damages on that account in the sum of $7,450; that during the performance of said contract plaintiff and said defendant agreed that plaintiff should take over defendant's work called for in said contract, and pay all obligations incurred by defendant Morris in the performance of said contract, and would hold said defendant harmless because of loss due to the execution or performance of said contract, and because of bills for labor and material contracted by said defendant, in consideration of said defendant waiving all claims which he had against the plaintiff on account of said ornamental iron and lumber and on account of his claim for bonus and on account of his claims for extras, and that thereafter the plaintiff took over the completion of said contract; and that by reason thereof there was an accord and satisfaction of all claims made by the plaintiff as set forth in its petition.

Said defendant Morris renewed his allegations above set out in his plea of accord and satisfaction, and plaintiff's refusal to select arbitrators, and because thereof prayed judgment for $29,632.45 as a counterclaim.

Defendant Southwestern Surety Insurance Company pleaded in defense of its liability as surety the same matters alleged by defendant Morris constituting his plea of accord and satisfaction, and further pleaded that plaintiff failed to comply with the provisions of said defendant's bond in respect to giving notice to it of the default of said defendant Morris in not complying with the terms of his contract, and that plaintiff wholly failed to notify said surety company wherein the conditions of said contract had been breached.

Replying to the above, plaintiff set out the terms of the contract in relation to extra work and the selection of arbitrators, and that the architects approved defendant Morris' account for extra work in the sum of $11,213.40, and that defendant Morris assented to such allowance, and did not ask for the selection of arbitrators until long thereafter, and not until long after he had filed his counterclaim. Plaintiff further alleged that the contract provided that all questions of right of way among contractors in case of dispute should be left to the architects, and due allowance was made for the time consumed by other contractors in the performance of their work by the terms of said contract, and that no extension of time should be allowed to defendant Morris on account of the work of other contractors, unless, in the opinion of said architects, such other contractors should cause said defendant unreasonable delay. In that event, the time for completion should be extended upon the certificate of the architects; that no such certificate of extension was issued by the architects, and if any such delay occurred, it was in accordance with the terms of the contract, and plaintiff owed defendant Morris nothing on that account.

The reply to the second amended answer of defendant Morris contained a general denial, and set up the matters alleged in its reply to the second amended answer of the defendant surety company in relation to extra work and in relation to the agreement upon the sum of $11,213.40 therefor, and failure to ask for arbitrators until long thereafter. Said reply also set up the same matters in defense to the claim for bonus, and pleaded the same matters in defense to the counterclaim of said defendant.

Upon motion of the plaintiff, Hon. Daniel C. Ketchum was by the court appointed referee. Such appointment was made on the theory that the trial of the issues of fact involved and required the examination of a long account. Thereafter defendants filed a motion to set aside the order of reference, on the ground that the second amended reply of the plaintiff to the answer of defendants wholly changed the issues from those existing and made by the pleadings on the date this cause was referred, thereby depriving the case of the characteristics necessary to the reference, and left the issues in the case solely those which are to be determined by a jury under the Constitution of this state. This motion was overruled by the court.

Thereafter said referee proceeded to hear the evidence, and in due time filed his report. He found the due execution of the bond sued on and the contract with its specifications; that defendant Morris neglected to include items of $5,270 and $2,892 for lumber and ornamental iron; that neither plaintiff nor its agents interfered with or influenced said Morris in making up his bid, and did not know at the time the contract was let that he had neglected to Incorporate said items in his estimate; that the claim of said Morris that, after discovering his error, he went to plaintiff's representative, and threatened to quit the work, and was told by him to go ahead, and he would take care of him, is not sustained by the evidence.

In response to the claim of accord and satisfaction the referee found against defendant, and in his report details a number of facts found by him bearing upon said issue. On the question of bonus to the defendant Morris for the completion of said contract prior to the contract date, said referee found against defendant. On the question of liquidated damages to the plaintiff because of delay of defendant Morris in completing the contract, the referee found in favor of the plaintiff in the sum of $3,000, being 30 days' delay at the sum of $100 a day. On plaintiff's claim for damages in the sum of $1,000 for failure of the defendant Morris to keep...