Parsons Const. Co. v. Gifford

• Decision Date: 20 September 1935
• Docket Number: 29128.
• Citation: 262 N.W. 508,129 Neb. 617
• Parties: PARSONS CONST. CO. v. GIFFORD ET AL.
• Court: Nebraska Supreme Court

262 N.W. 508

129 Neb. 617

PARSONS CONST. CO. v. GIFFORD ET AL.

No. 29128.

Supreme Court of Nebraska.

September 20, 1935

Syllabus by the Court.

1. A subcontractor is required to file a statement of the amount due him within sixty days from the date of furnishing the labor or material to secure a lien upon the premises.

2. Generally, there is no debt existing between the owner of the premises and a subcontractor independent of the statutory lien.

3. A subcontractor is not entitled to a mechanic's lien for labor and materials furnished in the construction of a building where the structure is defective and unsafe due to his poor or improper workmanship and is not accepted by the owner but is removed.

4. A trifling failure to perform the contract is not sufficient to defeat a mechanic's lien where it appears that there has been a substantial compliance.

5. Where a subcontractor builds a reinforced concrete structure which is so defective and unsafe because of poor workmanship that it is necessary to remove it, there is not a substantial compliance with the contract.

6. A court of equity which has obtained jurisdiction for any purpose will retain jurisdiction for the purpose of administering complete relief with respect to the subject-matter.

7. A court of equity which has jurisdiction at the commencement of a suit will retain it where the issues presented are in the nature of an accounting and are so numerous, so distinct, and the evidence to sustain them so variant, technical and voluminous that a jury is incompetent to deal intelligently with them and reach a just conclusion.

8. " The preventing of a multiplicity of suits in connection with other grounds of equitable cognizance may justify a court of equity in entertaining jurisdiction." Rogers v. Selleck, 117 Neb. 569 , 221 N.W. 702.

9. It is the general rule that one injured by a breach of contract is entitled to recover all his damages, including profits prevented and losses sustained which are certain and naturally follow the breach.

Appeal from District Court, Douglas County; Hastings, Judge.

Suit by the Parsons Construction Company against Sanford R. Gifford sole surviving executor and trustee of the estate of Harold Gifford, deceased, Benson & Garrett Company, Conant Hotel Company, B. Grunwald, Incorporated, and another, wherein named defendants filed cross-petitions. From an adverse decree, first-named defendant appeals.

Affirmed as modified.

Will H. Thompson and Yale C. Holland, both of Omaha, for appellant.

King & Haggart, of Omaha, for appellee Parsons Const. Co.

Weaver & Giller, Gaines, McGilton, McLaughlin & Gaines, Wear, Moriarty, & Nye, and Brome & Thomas, all of Omaha, for appellee Conant Hotel Co. and others.

Heard before ROSE, GOOD, EBERLY, DAY, PAINE, and CARTER, JJ., and THOMSEN, District Judge.

DAY Justice.

This was a suit for the foreclosure of a mechanic's lien by a subcontractor. The decree denied foreclosure and canceled the lien. Thereafter, the case proceeded as one for damages with the owner of the premises, the general contractor, subcontractors, lessee of premises, and the bonding company litigating the issues between them. In 1929 the Benson & Garrett Company conceived the idea of placing four additional stories on top of the Sanford Hotel building owned by Dr. Harold Gifford. They consulted with the Parsons Construction Company and John Latenser & Sons, architects. They negotiated a lease with the Conant Hotel Company, tenant in the building, for the additional space. The scheme was presented to the owner who accepted the proposal in October, 1929. The substance of the arrangement was that the Conant Hotel Company had leased the additional space at an annual net rental of $8,000 a year and had agreed to advance $26,000 toward the cost, to be repaid out of the rental; that Benson & Garrett was to get a new loan for $210,000 which would completely finance the project and pay off the existing mortgage on the premises; that Benson & Garrett was to pay all the architect fees and incidental expenses and post a bond guaranteeing complete satisfaction to all concerned; that the time to complete the work was estimated at five months. Thereafter, on November 20, 1929, Benson & Garrett entered into a contract with the plaintiff, Parsons Construction Company, as principal subcontractor, to erect the addition in accordance with the agreement with the owner and the drawing and specifications furnished by John Latenser & Sons, architects. On November 28, 1929, Dr. Gifford died, before the loan was procured and before any work had been done on the contract. It had become impossible to secure the loan, but one was secured for $150,000 which was sufficient to pay the existing mortgage.

As a result of many negotiations between the executors of the estate of Gifford and the Benson & Garrett company, a new contract was executed, restating the agreement for building the addition which was approved by the county court. It provided in substance that Benson & Garrett should be accountable for the performance of the contract and would build the addition and deliver it fully completed and free of all liens or claims arising in any manner from the construction; that Benson & Garrett warranted the plans and specifications were sufficient for the intended purpose and satisfactory to the executors and the Conant Hotel Company; that the risk of said building until completed and accepted by the executors and Conant should be that of Benson & Garrett; that the building should be completed by January 15, 1931. The Metropolitan Casualty Insurance Company executed its bond in the sum of $75,000, conditioned upon the performance of the contract by Benson & Garrett. Benson & Garrett contracted with Parsons Construction Company, B. Grunwald, Inc., and Harry Binder as subcontractors. Construction was commenced under these contracts and concrete work, columns and floors for two stories were poured and, upon estimate of architects, $5,872.31 was paid to Benson & Garrett and by them paid to the architects and Parsons Construction Company. Later, when the forms were re moved from the concrete work, defects appeared which caused the work to be condemned by the architects. Considerable controversy arose between Benson & Garrett, the architects, and Parsons Construction Company, about this work, which was finally torn down and removed under an agreement of November 18, 1930, between Benson & Garrett and Parsons Construction Company, that the responsibility for the defective work was to be determined later. The concrete work was torn down in December, 1930, and immediately an argument ensued relative to the sufficiency of the plans and specifications. Tests were made with haydite aggregate concrete of which the building was to be constructed. On January 30, 1931, an extension of time was granted to August 15, 1931, to complete the work. From that time until May 23, 1931, Parsons Construction Company was refusing to proceed with the work on the ground that the plans and specifications were insufficient and impractical. But, on May 23, 1931, Parsons Construction Company agreed to proceed with the construction. On May 27, 1931, the executors ordered Benson & Garrett and Parsons Construction Company to remove their material and equipment from the building. Thus far, it has been intended merely to narrate the history from the beginning of the transaction giving rise to this litigation. An abstract of the pleadings seems necessary to an understanding of the issues presented and tried in the district court.

This suit was tried upon the amended petition of the plaintiff filed December 16, 1931, alleging the contract between Benson & Garrett and Gifford and between Benson & Garrett and plaintiff. It was alleged that the Conant Hotel Company was the lessee of the building to be constructed; that the plaintiff was to do certain construction work according to the specifications of the architect for a profit of $4,000; that the building was to be of reinforced haydite concrete construction; that on its first cause of action it is entitled to recover for labor and materials furnished or purchased for said addition $14,013.70, less $3,482.64 which has been paid, or $10,531.06; that on its second cause of action it is entitled to recover $783.83 for extra labor and material furnished at the special instance and request of Gifford; that it is entitled to recover on its third cause of action $4,000 as its profit on said contract; that it was ready, willing and able to construct the building according to the plans and specifications furnished by the defendant and the building code of the city of Omaha, but that on the 27th day of May, 1931, without justification, Gifford canceled the contract.

Gifford in his answer and cross-petition admits the contract with Benson & Garrett company; the contract between Benson & Garrett and Parsons Construction Company the lease of Gifford with Conant Hotel Company, and that B. Grunwald claims lien on the premises, and denies other allegations. Gifford then alleges that Benson & Garrett had procured plans and specifications for the additional stories and warranted the plans and specifications were sufficient for the intended purpose and that the building would be completed to the satisfaction of Gifford. This answer alleges and sets out provisions of the contract relative to the construction work alleges that the plaintiff in September, 1930, commenced work under the contract and constructed the concrete work for two floors, but not according to the plans, specifications, and contracts, and in a good workmanlike manner, but that it was faulty and defective and was condemned by the architect and ordered torn down and removed; that the concrete work...