National Surety Corp. v. Curators of University of Mo.
| Citation | 268 F.2d 525 |
| Decision Date | 06 July 1959 |
| Docket Number | No. 16169.,16169. |
| Parties | NATIONAL SURETY CORPORATION, a Corporation, Appellant, v. CURATORS OF UNIVERSITY OF MISSOURI ex rel. PAUL MUELLER COMPANY, a Corporation, Appellee. |
| Court | United States Courts of Appeals. United States Court of Appeals (8th Circuit) |
James H. Keet, Springfield, Mo., for appellant.
E. C. Curtis, Springfield, Mo. (Farrington & Curtis and Thomas Strong, Springfield, Mo., were with him on the brief), for appellee.
Before SANBORN, VOGEL, and VAN OOSTERHOUT, Circuit Judges.
VAN OOSTERHOUT, Circuit Judge.
This is an appeal by defendant, National Surety Corporation, on the performance bond given to the Curators of The University of Missouri on behalf of C. Wallace Plumbing Company, Inc. (Wallace), general contractor for the heating, ventilating, and air conditioning work on a Teaching Hospital building being erected at the University of Missouri, from judgment rendered against it upon such bond in favor of plaintiff, Paul Mueller Company, for an alleged unpaid balance due on its subcontract with Wallace. Defendant admits that it is obligated by its bond to pay any sum that may be justly due plaintiff on its subcontract. This suit is against the defendant surety only. Jurisdiction exists by reason of diversity of citizenship and the requisite jurisdictional amount.
The liability of the defendant is dependent upon the liability of its principal, Wallace, to the plaintiff. The defendant denies that there is any balance due plaintiff on the subcontract. The subcontract here in controversy calls for the payment of $176,101. This sum has been paid plaintiff except for the $3,277.36 involved in this action, for which amount judgment has been entered.
Defendant's defense is that the plaintiff by its subcontract, among other things, agreed to "balance the air distribution system" in accordance with paragraph 100(e) and (f) of the plans and specifications; that plaintiff failed to fully perform such duty; and that upon plaintiff's refusal to do such work Wallace had the disputed work done by others and back-charged the cost thereof to the plaintiff. The reasonable cost of the back-charged work exceeded the amount withheld by Wallace. Thus, as stated by the plaintiff in its brief, the sole issue in this case is whether or not the Mueller Company, in carrying out its subcontract with Wallace, did "balance the air distribution system" as required by the subcontract. If plaintiff by its subcontract obligated itself to perform the disputed work, hereinafter more specifically described, it is not entitled to recover. If plaintiff was not required to do such work, the judgment must be affirmed.
Wallace held the general contract for heating, ventilating, and air conditioning the hospital. The plans and specifications were made part of its contract with the Curators, and Wallace was required to perform all work in the manner required by such plans and specifications. The written subcontract here in controversy signed by Wallace and the Mueller Company, so far as here material, provides:
The real controversy in this case relates to the obligation assumed by plaintiff by paragraph Twenty-Fourth C, above quoted. The section of the plans and specifications referred to in Twenty-Fourth C reads as follows:
Other subparagraphs of paragrah 100, not material here, refer to other tests and adjustments to be made of the air conditioning equipment.
Plaintiff concedes that it was required to do the work described in paragraph 100(e) and (f)1. It has performed such work. Plaintiff has not performed the work described in paragraph 100(f)2 to 6, inclusive, and denies that it is obligated to perform such work, plaintiff's contention being that its testing and adjustment duties under its subcontract are limited to those described in paragraph 100(e) and (f) which fall into the category of "balancing the air distribution system," and that items set out in 100(f)2 to 6, inclusive, do not fall into such category.
This case was tried to the court. The court found that the plaintiff was not required to do the work listed in paragraph 100(f) 2 to 6, inclusive, and hence plaintiff was entitled to the unpaid balance claimed on the subcontract and judgment was entered therefor.
The court made no findings of fact except such as appear from his reported remarks made at the close of the evidence. We find nothing therein which expressly determines that the subcontract is ambiguous with reference to the disputed work here involved. The court did say, "I am impressed with the thought that about the only issue is to determine what is meant in the trade or profession, or whatever area you use, as the criterion of the words `balance the air distribution system.'" The court then in effect found from conflicting oral evidence of experts that "balance" is limited to the type of work which sheet metal workers usually claim, and that the work listed in 100(f)2 to 6, inclusive, is not work claimed by sheet metal workers. The court found that the plaintiff had complied with its subcontract by doing that portion of the work required by 100(f) which falls in the category of sheet metals work.
Sharply conflicting oral evidence was introduced by both sides as to the meaning of "balance the air distribution system" as the term is used in the trade, and as to what part of the work required by 100(e) and (f) could be done by sheet metal workers.
It is apparent from the court's remarks and the judgment entered that the court reached his conclusion on the basis of the parol evidence as to custom and usage, and that by so doing the court impliedly determined that the subcontract was ambiguous.
Defendant contends that the subcontract is an unambiguous integrated contract and that parol evidence cannot be considered to vary its terms.
We proceed to an examination of the applicable law.
Wallace is a Texas corporation. Plaintiff is a Missouri corporation. The subcontract here involved was negotiated, executed, and delivered in Texas. The work was to be performed in Missouri. There may be some uncertainty as to whether the law of Missouri or Texas applies in the interpretation of this contract. See Edward E. Morgan Co., Inc., v. United States, 5 Cir., 230 F.2d 896, 902; Restatement of the Law of Conflict of Laws, §§ 346, 358. We deem it unnecessary to resolve the complicated conflict of laws question presented since we believe that the result would be the same whether Missouri or Texas law is applied.
Under Missouri law, Texas law, and the law generally, an integrated unambiguous contract cannot be varied by parol evidence. Patton v. Crews, Tex. Civ.App., 264 S.W.2d 467, 470; Remington Rand, Inc. v. Sugarland Industries, 137 Tex. 409, 153 S.W.2d 477, 483; Lewis v. East Texas Finance Co., 136 Tex. 149, 146 S.W.2d 977, 980; Warinner v. Nugent, 362 Mo. 233, 240 S.W.2d 941, 944; Commerce Trust Co. v. Watts, 360 Mo. 971, 231 S.W.2d 817, 820; 32 C.J.S. Evidence, § 851; 20 Am.Jur., Evidence, § 1099. In the Remington Rand case the court states, at page 483 of 153 S.W.2d:
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