National Surety Corp. v. City of Excelsior Springs
| Decision Date | 18 December 1941 |
| Docket Number | No. 11965.,11965. |
| Citation | 156 ALR 422,123 F.2d 573 |
| Parties | NATIONAL SURETY CORPORATION v. CITY OF EXCELSIOR SPRINGS, MO., ex rel. and to Use of SCHWARZENBACH. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Otto O. Fickeissen, of St. Louis, Mo. (Roy W. Crimm, of Kansas City, Mo., on the brief), for appellant.
Lancie L. Watts, of Kansas City, Mo., for appellee.
Before GARDNER, WOODROUGH, and THOMAS, Circuit Judges.
This was an action brought for the use of A. C. Fitze against the National Surety Corporation, to recover on a bond given by MacDonald Construction Company to the City of Excelsior Springs, Missouri, on which the National Surety Corporation was the surety. The MacDonald Construction Company had been awarded a contract for the construction of the Hall of Waters in the City of Excelsior Springs. The bond not only insured the performance of the contract but the payment of all labor and materials used in its performance. Fitze was a subcontractor. His complaint alleged that he had entered into an oral contract with MacDonald Construction Company, whereby he was to do the marble and tile work on the Hall of Waters on a cost plus ten per cent basis. The original complaint demanded judgment for $3,035.85 as a balance due plaintiff.
The complaint alleged that of the total cost of the work of $16,345.95, the general contractor, MacDonald Construction Company, had left unpaid bills amounting to $1,401.26; that under plaintiff's contract he was entitled to ten per cent on the entire cost, so that there was due him the sum of $1,401.26 for cost of labor and material, and the sum of $1634.59, the ten per cent commission, making a total due of $3,035.85. The complaint was later amended to increase the demand to $3,214.34. The amended complaint alleged that the cost of materials and labor was $16,508.21; that the contractor, MacDonald Construction Company, had left unpaid on the cost of labor and material the sum of $1,563.52, which added to the ten per cent commission on the entire amount of cost made the sum of $3,214.34 due him. The amended complaint was filed November 14, 1938.
On February 14, 1939, the parties, by their respective attorneys, filed a written stipulation to the effect that under the contract between MacDonald Construction Company and Fitze, if the jury should find that the contract ultimately agreed upon by the parties was a "cost plus ten per cent contract," the verdict and judgment should be for plaintiff in the sum of $1,867.71, with interest from October 28, 1937, to the date of the judgment and the costs of the case. The stipulation also provided that if the jury should find that the contract ultimately agreed upon by the parties was a "lump sum contract," the verdict and judgment in favor of plaintiff should be for $53.76.
The surety company, in its answer to the amended complaint, filed December 13, 1939, challenged the jurisdiction of the court on the ground that the amount in controversy did not exceed, exclusive of interest and costs, the sum of $3,000. The answer also denied that the Fitze contract was an oral one for cost plus ten per cent, but alleged that it was a written contract for a lump sum and that on that contract there was due only the sum of $53.76.
Following the filing of the written stipulation signed by counsel for the respective parties, defendant moved to dismiss the action on the ground that the court had no jurisdiction because the proper jurisdictional amount was not involved. After hearing testimony on the motion, the court denied it, finding that: "The plaintiff could not be charged with wilfully ignoring facts or with wilfully neglecting to secure the facts." The action was tried to the court and a jury, and at the close of all the testimony, defendant moved for a directed verdict, which motion was denied and the case was submitted to the jury upon instructions to which neither party saved any exceptions. The jury returned a verdict for Fitze for the amount admitted in the stipulation to be due if his contract with the MacDonald Construction Company was a cost plus contract. Defendant moved for judgment notwithstanding the verdict, or for a new trial in the alternative, which motion was denied, and from the judgment entered on the verdict, the surety company prosecutes this appeal and seeks reversal on substantially the following grounds: (1) The court was without jurisdiction and erred in refusing to dismiss the action for lack of jurisdiction; (2) plaintiff, Fitze, having contracted to do all the tile and marble work required on the building according to plans and specifications for a lump sum, any agreement changing the basis of compensation and for increased compensation was without consideration, and hence, not binding on the contractor, MacDonald Construction Company; (3) the court erred in admitting evidence that MacDonald Construction Company paid Fitze's labor and material bills.
At the very threshold of this case we are confronted with a challenge to the jurisdiction of the lower court. As already outlined, plaintiff's complaint as amended demanded judgment for $3,214.34. Some three months after the complaint had been filed, the parties filed the written stipulation referred to, indicating that in no event was plaintiff entitled to recover more than $1,867.71 with interest from October 28, 1937, to the date of judgment, and the costs of the case. At the hearing on defendant's motion to dismiss, the court took evidence confined to that issue. Fitze testified that at the time the complaint was filed, he did not have the information that he had at the time of the hearing; that the stipulation was signed by his attorney, but that he still considered that he was entitled to more than $3,000. He said: "I never got any statement from the MacDonald Construction Company." There was attached to the original complaint a copy of a sheet of Fitze's ledger and at the hearing the original ledger sheet in Fitze's handwriting was produced. That ledger sheet is made up of various items and showed a balance due Fitze of $3,035.85, as alleged in the original complaint. It appeared from the testimony at that hearing that Fitze made a ledger record of the items, including bills, and then gave written instructions to the contractor to pay these bills. When the contractor paid the bills Fitze made a record of it on the margin of his ledger sheet. In March, 1937, he asked the construction company for a statement showing the amount that had been paid out by it on account of labor and materials. This was not furnished him. He made similar request for the following month, which was not complied with. For the third month he made a similar request, which was declined. The only information during the seven months' progress of this work which he received as to payment of bills for labor or material was when he specifically asked one of the employees on the job whether a specific bill had been paid. At the completion of the job, not having received statements from the contractor, Fitze prepared a statement of his account and sent it to the MacDonald Construction Company, in which he gave the figures that appear on his ledger.
It was plaintiff's theory that he was entitled to recover the amount of the unpaid labor and material bills plus ten per cent of the total cost. Fitze claimed to have paid out, in addition to the labor and material bills, insurance amounting to $498.24, which added to the ten per cent cost plus and the amount of the unpaid labor and material bills amounted to $3,212.89. Fitze sent a statement to the MacDonald Construction Company showing these amounts and this made up the total of the amount claimed in the amended complaint. No response was made by the contractor to these demands, but it apparently acquiesced therein. After the suit was filed, the plaintiff was required to make his complaint more definite and certain and set out every item. In doing so, plaintiff's counsel first learned about the payment of certain of the bills, and realizing that the plaintiff did not have coming from the defendant all that he originally claimed, signed the stipulation.
At the trial of the action on the merits, plaintiff testified that over a period of several months he requested from the construction company a statement showing what bills had been paid by that company but that no such statement was furnished him until after the suit was filed. William MacDonald, in charge of the affairs of the MacDonald Construction Company during the times in question, was a witness for the defendant and on cross-examination he testified that Fitze made various demands of him for a statement as to what was due Fitze. He also admitted that Fitze had sent to the construction company statements of the account as he claimed. Referring to the amount claimed in Fitze's demand, the witness said: "The statement says $3212." The...
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