Megrath v. Gilmore

• Decision Date: 24 December 1894
• Citation: 39 P. 131,10 Wash. 339
• Parties: MEGRATH v. GILMORE ET AL.
• Court: Washington Supreme Court

39 P. 131

10 Wash. 339

MEGRATH v. GILMORE ET AL.

Supreme Court of Washington

December 24, 1894

Appeal from superior court, King county; T. J. Humes, Judge.

Action by John Megrath against David Gilmore and others. From a judgment for plaintiff, defendants appeal. Reversed.

Burke, Shepard & Woods, for appellants.

Stratton Lewis & Gilman and Carr & Preston, for respondent.

STILES J.

David Gilmore and William H. Kirkman, in 1889, caused plans and specifications to be prepared for a building to be erected on their joint property in the city of Seattle, and thereupon invited bids from contractors for the erection of the building. Two bids were received,-one, that of respondent for $98,000, and another, that of a third party, for $96,840. Gilmore and Kirkman desired to favor respondent, and proposed that they would accept his bid, but that, as they did not wish to appear to reflect on the lower bidder in any way they would make their principal contract for the building, which was to be in writing, at $96,000, and give respondent a separate obligation for $2,000. Thus far the transaction occurred between Gilmore and respondent only, Kirkman residing in Walla Walla, and not being present. Gilmore had full authority from Kirkman to make any contract he saw fit. Within a day or two after the agreement as to the bid, the architect who had prepared the plans and specifications filled up one of his blank contracts. in duplicate, with the names of respondent and John Collins, as parties of the first part, and Gilmore and Kirkman, parties of the second part, and otherwise prepared it for signing. Respondent and Gilmore met at the architect's office to sign the contract, which was dated March 8, 1891, on that day, whereupon respondent stated that one Redward was to join him in the contract, and his name was inserted as a party of the first part. Respondent, Collins, and Gilmore signed both copies of the instrument, but Redward refused to sign, and nothing further was said about him. Some question was made as to whether Kirkman's name should be appended, but for some reason it was omitted. One side of this case maintains that his signature was never waived; while the other asserts that it was then and there agreed, upon the suggestion of the architect, that it was not necessary that Kirkman should sign, because Gilmore had full authority from him to act for them both in all matters pertaining to the proposed building. Respondent took one of the copies, and the architect retained the other for Gilmore. Collins was merely a surety for respondent, as it is now made to appear. This writing contained the usual articles found in such agreements, 12 in number, each set forth with much detail. The date for the completion of the building was fixed at October 10, 1889, for the lower portion, and at November 10th for the upper portion, with a provision for demurrage at the rate of $25 per day for each uncompleted portion beyond the dates named. Provisions were made that the architect should be the sole arbiter of certain described matters should they come into dispute, and, in case of any other dispute, it should be settled by another method of arbitration, provided for. Extra work was to be settled for as determined by the architect, if satisfactory to both parties, but otherwise by the second method of arbitration. The contractor was required to procure a builder's insurance policy for the benefit of Gilmore and Kirkman, as security for such money as they might advance. Payments were to be made every two weeks after the commencement of work, to the extent of 90 per cent. of the work performed, upon architect's certificates; final payment within 90 days after completion. The time of completion was not to be extended by reason of extra work ordered. The contract price was stated to be $96,000. Work on the building was at once commenced, and proceeded with to completion, but not within the times mentioned above, so that there arose a question as to demurrage. Extra work to the amount of several thousand dollars was done, and a small amount of work was omitted. Gilmore and Kirkman themselves procured and paid for the insurance. Upon an attempt at a settlement a serious dispute arose. Ninety-eight thousand dollars was conceded to have been the real contract price, and of this sum $86,400 had been paid, leaving a balance of $11,600. The respondent claimed $6,653 for extras, and demanded this sum in addition to the balance of the contract price, but refused to allow anything for demurrage, insurance, or uncompleted work. The architect estimated the extras at only $4,497.21; and the owners claimed for demurrage $6,050, insurance $429.07, uncompleted work $257.50. At Gilmore's suggestion, the extras were raised to $5,000; but he refused to settle except upon the terms of the contract, which he claimed justified the other demands made by him. Out of this contention there resulted a final certificate made by the architect showing a statement of the account on the basis proposed by Gilmore, and a balance due respondent of $9,863.43. This certificate was delivered to respondent, and by him carried and delivered to Gilmore, who forthwith gave him a bank check for the amount, containing on its face, after the amount, the following: "Which is payment in full for all claims in the construction of the Gilmore & Kirkman Building." The check was paid in due course, April 2, 1890.

In February, 1891, respondent commenced this action, alleging a contract entered into about March 1, 1889, between himself and Gilmore and Kirkman for the erection of the building, in accordance with the plans and specifications prepared by the architect named in the writing referred to, for the sum of $98,000; the facts constituting his claim for extra work, in the sum of $6,653; and that he had been paid only $96,263. Judgment was demanded in the sum of $8,390. No reference was made to the purported final settlement. The answer pleaded the writing referred to, as the only contract ever entered into between the parties; the facts constituting the opposing claims of the defendants as above noted; and the alleged final settlement as an accord and satisfaction. There was also an allegation that the signing of the writing by Gilmore was done by him, and was accepted by plaintiff as a sufficient execution of the contract; that Gilmore was duly authorized in that behalf by Kirkman, who adopted the instrument; and that all parties acted upon it as the contract of Gilmore and Kirkman. The reply was a general denial of the new matter in the answer, except that there was an admission that $259.50 should be credited for uncompleted work. It will thus be seen that the theory of the plaintiff's action was an express contract for the erection of the building for the sum of $98,000, ignoring the written agreement (because it was not signed by Kirkman) and the alleged final settlement. The defense maintained the integrity of the written contract, either by sufficient execution or through subsequent assent by the conduct of the parties, and the finality of the settlement. Judgment was for the full amount demanded in the complaint. The errors alleged relate wholly to the denial of the motion for a nonsuit, and the motion for a new trial on the ground that the verdict was against...