Lonergan v. San Antonio Loan & Trust Co.

• Decision Date: 30 October 1907
• Citation: 104 S.W. 1061
• Parties: LONERGAN et al. v. SAN ANTONIO LOAN & TRUST CO
• Court: Texas Supreme Court

Page 1061

104 S.W. 1061

LONERGAN et al. v. SAN ANTONIO LOAN & TRUST CO

Supreme Court of Texas.

October 30, 1907.

Error to Court of Civil Appeals of Fourth Supreme Judicial District.

Action by the San Antonio Loan & Trust Company against Thomas Lonergan and the American Surety Company of New York; John W. Rapp intervening. From a judgment of the Court of Civil Appeals, affirming a judgment for plaintiff, defendants and intervener bring error. Judgment as to defendant Lonergan and intervener affirmed; and, as to defendant company, reversed and remanded.

Newton & Ward, Stayton & Berry, Swearingen & Tayloe, and Thomas W. Bullitt, for plaintiffs in error. Denman, Franklin & McGown, for defendant in error.

BROWN, J.

The San Antonio Loan & Trust Company instituted this suit against Thomas Lonergan & Co., as principals, and the American Surety Company of New York as its surety to recover damages for the breach of a contract and bond entered into by the said parties, which we here copy: "Agreement made this 21st day of February, 1899, between San Antonio Loan & Trust Company of the one part, and Thomas Lonergan & Co., contractors, of the other part. Witnesseth: Said Thomas Lonergan & Co., contractors, hereby agree in consideration of the sum of forty-seven thousand, five hundred dollars to erect and build for said San Antonio Loan & Trust Company, as per plans and specifications, made by Alfred Giles, architect, of San Antonio, Texas, a certain building corner of Navarro and Commerce streets, in the city of San Antonio, Bexar county, Texas. The entire work to be strictly in accordance with said drawings and specifications, and also do further agree to perform the whole of the intended works, matters, and things under the direction of, and to the entire satisfaction of, the architect, whose decision is to be final and conclusive on all points. The entire Commerce and Navarro street front to be terra cotta set and pointed up in the best manner as per said plans and specifications and drawings."

Thomas Lonergan & Co. executed a bond in the sum of $45,000 with the American Surety Company of New York as surety, payable to the San Antonio Loan & Trust Company, the conditions of which are as follows: "Now if the said Thos. Lonergan & Co. shall strictly and faithfully carry out and perform the said contract so entered into with said San Antonio Loan & Trust Company in all particulars as required by the terms thereof, and to the full approval of said architect shall complete said works in the time required by this contract, shall save said San Antonio Loan & Trust Company harmless from all damages growing out of a negligent or unskillful performance of work under said contract, or resulting from any violation of any of the provisions contained in said specifications, or from a failure to comply with the same, from any cause whatever, which specifications and drawings are hereby specially referred to and made a part hereof, * * * then and in this case this instrument to be null and void. Otherwise to remain in full force and effect."

By indorsement on the bond it was made to embrace, the following supplemental contract: "This agreement, made this 26th day of April, 1899, between the San Antonio Loan & Trust Company, of the one part, and Thos. Lonergan & Co., contractors, of the other part, witnesseth: Said Thos. Lonergan & Co., contractors, hereby agree in consideration of the sum of four thousand four hundred and fifty dollars ($4,450.00) to erect and build for said San Antonio Loan & Trust Company, as per plans and specifications made by Alfred Giles, architect, of said San Antonio Loan & Trust Company, being drawing No. 25, a certain west wall of the new building of said San Antonio Loan & Trust Company, now being constructed by said Thos. Lonergan & Co., under contract heretofore made between them and San Antonio Loan & Trust Company, which said building is situated at the corner of Navarro and Commerce streets, situated in the city of San Antonio, Bexar county, Texas. The said wall to be strictly in accordance with the drawings and specifications prepared therefor by the said architect, and to be of skeleton construction with brick filling, and to be eight inches thick to the fifth floor, and the fifth floor to be twelve inches thick. The said Thos. Lonergan & Co. agree to perform the whole of said intended work, matters and things under the direction and to the entire satisfaction of said architect, whose decision is to be final and conclusive on all points. The said San Antonio Loan & Trust Company agree to pay said contractors said sum of money at the times and on the terms and conditions specified and provided by said plans and specifications, and stipulations therein contained. One month additional time is allowed on original contract. Unavoidable delays in procuring beams shall be taken in favor of contractor."

The petition alleged that, in pursuance of the said contract and bond, Thos. Lonergan & Co. entered upon the performance of the work of building the said house, and prosecuted the same until it was nearing completion, when the said house fell, and that said Thos. Lonergan & Co. failed and refused to replace the said building, but abandoned the said work. The plaintiff alleged that it had performed all of its promises in the said contract, and in accordance with the terms thereof had paid to the said Thos. Lonergan & Co., for labor, materials, etc., the sum of $25,720. It was alleged that both Thos. Lonergan & Co. and the American Surety Company had refused to replace and rebuild the said house, whereby the plaintiff was damaged in the sum paid for materials, labor, etc., under the contract, and in other sums specified in the petition but not necessary to be stated here.

Thos. Lonergan & Co., answered by general demurrer, special exceptions, by general denial, and by special answer, setting up the following defenses: As a special defense to its obligation to rebuild the structure, Thos. Lonergan & Co. alleged, in substance, that the building did not fall by reason of any defect in the material used by it in the construction of the said building, nor for want of skill and care in the construction of the same, but that the said collapse was caused solely by defects and imperfections in the plans and specifications furnished by the loan and trust company to guide the said defendants in the performance of their work; that the said collapse was caused by want of skill on part of the architect who represented the loan and trust company, and by want of care on his part, as well as his directing the performance of things improper to be done and making changes in the original plans and specifications which weakened the building and caused its fall. There was no question made upon the sufficiency of the allegations in the answer to present the issue and we have not undertaken to set them out with any degree of particularity, but state in general terms the defenses presented. Thos. Lonergan & Co. pleaded that the architect, Giles, inspected the work and material and accepted the same at different times, whereby plaintiff was estopped to deny its liability therefor, and pleaded in reconvention against the plaintiff for the value of work done and material furnished and not paid for, based upon the facts set up in the answer to the amount of $18,930.

The American Surety Company of New York adopted the answer of Thos. Lonergan & Co., presented general demurrer and special exceptions to plaintiff's petition, general denial of the allegations of the petition, and pleaded specially that the contract between the plaintiff and Thos. Lonergan & Co., supplemented by the contract dated April 26, 1899, with the specifications and plans, which were made a part thereof, was incapable of execution or performance because of uncertainty therein, pointing out the uncertainty relied upon, which is not necessary for us to set out at this time. The said surety company further pleaded that the specifications constituting a part of the original contract and the bond guaranteeing a performance of the contract by the said Thos. Lonergan & Co. contained certain provisions, which are set out in the plea, and then alleged that after the execution and delivery of the original contract dated February 21, 1899, and the execution and delivery of the supplemental contract and bond, the San Antonio Loan & Trust Company and Thos. Lonergan & Co., without the knowledge or consent of the American Surety Company of New York, by an agreement entered into between themselves, altered in various and sundry ways the terms and conditions of the said original contract and supplemental contract and altered the amount and character of the materials to be used and the work to be done, and agreed upon a performance by the said Thos. Lonergan & Co. of certain extra additional work not mentioned in nor contemplated by the said original or supplemental contract; that at the time of the making of the said agreement as to the alterations no agreement was made as to the addition to or deduction from the original contract price on account thereof, nor upon the additional items necessary to complete the same, nor was any such agreement reduced to writing and indorsed either upon the original or supplemental contract, nor was there any attempt to make an agreement with reference to either of these subjects, nor was the decision of the architect asked in reference thereto, nor were the changes noted on the contract whereby the said American Surety Company was discharged from its obligations upon the bond as the surety of Thos. Lonergan & Co. The answer specified 16 separate and distinct changes, alterations, and items of extra work by which it was discharged, but they will not be inserted in this statement, but referred to as may be necessary. The answer also contains a plea of estoppel, in this, that the architect was to have full power to dismiss from the works...