Montgomery v. Karavas
| Decision Date | 16 May 1941 |
| Docket Number | No. 4562.,4562. |
| Citation | 45 N.M. 287,114 P.2d 776 |
| Parties | MONTGOMERYv.KARAVAS et al. |
| Court | New Mexico Supreme Court |
OPINION TEXT STARTS HERE
Appeal from District Court, Taos County; Irwin S. Moise, Judge.
Action by Elmer Montgomery against John Karavas and another, a copartnership composed of John Karavas and James Karavas, and doing business as Karavas Brothers, to recover a balance of $8,735.70 and to foreclose a lien securing it, alleged to be due the plaintiff by defendants upon a contract for the construction of a hotel. The defendants filed a cross-action. From the judgment, the plaintiff and the defendants appeal.
Affirmed in part, and remanded with instructions.
The object of “cross-bill” is either to obtain discovery of facts in aid of defense or to obtain full and complete relief to all parties as to matters charged in original bill. Comp.St. 1929, § 105-405.
Kiker & Sanchez, and Anthony J. Albert, all of Santa Fe, for appellant.
Seth & Montgomery, of Santa Fe, and Floyd W. Beutler, of Taos, for appellees.
This action was brought by appellant to recover a balance of $8,735.70 and to foreclose a lien securing it, alleged to be due him by appellees upon a contract for the construction of a hotel in the town of Taos, New Mexico.
The appellees denied liability in any amount, and by cross-action claimed an indebtedness due them by appellant upon the same contract, in the sum of $13,344.12.
The trial court entered judgment for appellant in the sum of $1,250.15, as the balance due him after deducting certain credits found to be due appellees on their cross-action. From this judgment both parties appealed.
The substance of the trial court's findings of fact is as follows:
On January 17, 1938, the parties hereto entered into a written contract, by the terms of which the appellant agreed to construct a hotel building in Taos, New Mexico (subject to additions or deductions), for the agreed price of $28,000.
The following are some of the provisions of the contract:
“The owners agree to make payments on account of the contract, as follows: 85% of the value of the materials wrought into the construction of the building, plus materials delivered on the job for use in said building, and in addition thereto 85% of the value of the labor performed thereon, in monthly installments, on or before the 10th day of each succeeding month, upon certificate of the architect, and, the remaining 15% of material and labor, including the balance due under the contract, within thirty days after completion of the building, and certification of completion by the architect. ***
“All work performed and materials furnished under this contract shall be subject to the personal supervision and direction of the aforenamed architect (G. D. Gaastra) and shall be accepted by the owners only upon the complete approval of said architect. ***
“*** the architect shall, not later than the date when each payment falls due, issue to the contractor a certificate for such amount as he decides to be properly due. ***
“The architect may withhold or, on account of subsequently discovered evidence, nullify the whole or a part of any certificate to such extent as may be necessary to protect the owner from loss on account of:
“(a) Defective work not remedied.
“(b) Claims filed or reasonable evidence indicating probable filing of claims.
“(c) Failure of the contractor to make payments properly to subcontractors or for material or labor.
“(d) A reasonable doubt that the contract can be completed for the balance then unpaid.
“(e) Damage to another contractor.
“When the above grounds are removed payment shall be made for amounts withheld because of them.
***
“As the architect is, in the first instance, the interpreter of the conditions of the contract and the judge of its performance, he shall side neither with the owner nor with the contractor, but shall use his powers under the contract to enforce its faithful performance by both. ***
“The architect shall, within a reasonable time, make decisions on all claims of the owner or contractor and on all other matters relating to the execution and progress of the work, or the interpretation of the contract documents.
“The architect's decisions, in matters relating to artistic effect, shall be final, if within the terms of the contract documents.
“Except as above or as otherwise expressly provided in the contract documents, all the architect's decisions are subject to arbitration.
“Unless stipulated, the contractor shall provide and pay for all materials, labor, water, tools, equipment, light, power, transportation and other facilities necessary for the execution and completion of the work.
“If the architect and owner deem it inexpedient to correct work injured, or done not in accordance with the contract, an equitable deduction from the contract price shall be made therefor. ***
“If the contractor should neglect to prosecute the work properly or fail to perform any provision of this contract, the owner, after three days' written notice to the contractor may, without prejudice to any other remedy he may have, make good such deficiencies and may deduct the cost thereof from the payment then or thereafter due the contractor, provided, however, that the architect shall approve such action and the amount charged to the contractor.”
The appellant completed the building, together with extras and additions for which appellees had agreed to pay him $3,296.57, making the agreed consideration $31,296.57 for constructing the hotel with changes and additions. The trial court allowed appellees the following credits:
Cash payments on contract $22,042.07 Payments made for material by appellees 1,230.93 Hardware furnished by appellees, used in the construction of the building 350.00 Material bill paid by appellees to Rio Grande Steel Co 1,073.12 Material bill paid by appellee to T. Chas. Gaastra 3,179.05 Paid by appellees to Southwestern Accoustical Eng. Co 257.45 Allowance for defective tile construction 441.80 Allowance for other defective construction 1,580.00 Total credits $30,154.42
The parties do not question the correctness of the first two credits, totaling $23,273.
[1] The appellant asserts that the trial court erred in allowing appellees the credit of $350 for hardware, and claims that he is entitled to $350 additional on that account.
The following are provisions of the contract, material to a decision of this issue:
“The contractor agrees to furnish all labor and materials for the erection and construction of units 1 and 2 of a hotel building at Taos, New Mexico, in accordance with plans and specifications prepared by T. Charles Gaastra, Architect, of Albuquerque, New Mexico, with additions and alterations as hereinafter described. ***
“* * allowance for hardware, $350.00.
“Hardware. $350 shall be allowed by the contractor for finishing hardware, which will be furnished by the owner, but shall be affixed by the contractor. ***”
The appellees furnished the hardware, and the trial court did not err in allowing them credit therefor.
The appellees paid accounts due by appellant, as follows: To Rio Grande Steel Co., $1,973.12; to the architect, T. Charles Gaastra, $3,179.05; and to the Southwestern Accoustical Engineering Co., $257.45; for all of which the trial court gave appellees credit. These were accounts owing for material furnished to appellant by the respective companies mentioned, and which were used by him in the construction of the building, except as to interest, cost of filing liens to secure the three claims, and attorney's fees of $75 on the claim of the Rio Grande Steel Co. and $90.50 on the claim of the Southwestern Accoustical Engineering Co. Appellant agrees that credit should be allowed for the amount paid for material furnished and for filing liens, but contests the allowance of attorney's fees and interest.
[2] The appellees refused to make further payments, except upon certificates of the architect; and the architect refused to issue certificates for payment of eighty-five per cent of the value of the labor performed and material used and bought in or for the construction of the building, as required by the contract; because, as he contends, there was “defective work not remedied,” and claims outstanding, to secure which liens could be filed. The appellant asserts that the architect's refusal to issue certificates was “unreasonable and arbitrary;” that appellees were justly indebted to appellant in an amount far in excess of that required to pay the outstanding claims which were due under the terms of the contract, and to which he was justly entitled, and that such failure to pay resulted in the filing of liens and “permitted expense on account of the filing of mechanics' liens and interest to accrue thereon.” The argument in appellant's brief-in-chief is not that the...
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