Schillinger Bros. Co. v. Boschryan Grain Co.

• Decision Date: 05 May 1908
• Citation: 116 N.W. 132
• Parties: SCHILLINGER BROS. CO. v. BOSCHRYAN GRAIN CO. (GREEN, INTERVENER).
• Court: Iowa Supreme Court

116 N.W. 132

SCHILLINGER BROS. CO.

v.BOSCHRYAN GRAIN CO. (GREEN, INTERVENER).

Supreme Court of Iowa.

May 5, 1908.

Appeal from District Court, Linn County; J. H. Preston, Judge.

Action in equity to recover upon a building contract, and to foreclose a mechanic's lien. The case is stated in the opinion. There was a decree in favor of plaintiff and intervener, and defendant appeals. Affirmed in part, and reversed in part.Dawley & Wheeler, C. G. Layburn, and Chrissman & Sargent, for appellant.

Chas. A. Clark & Son, W. G. Clark, and McGaskill & Son, for appellee.

Redmond & Stewart, for intervener.

BISHOP, J.

On April 25, 1905, plaintiff and defendant entered into a contract writing whereby plaintiff agreed to construct and erect for defendant in the city of Cedar Rapids a building in size 64 by 180 feet, designed and intended to be used by defendant as a malting plant. According to the plans and specifications, made part of the contract, the exterior walls of the building, the floors, and all partition, bin and tank walls, were to be constructed of concrete with steel reinforcement--the details of construction and the kind and character of the materials to be used being specified. As we understand it, concrete wall work is accomplished by the use of board molds or forms set to the required width into which is placed the concrete mixture and there allowed to remain until it sets or hardens into a solid. When sufficiently set, the forms are raised up, and the process is repeated. The reinforcement is by steel rods introduced into the forms in connection with the concrete mixture, and which becomes a part of the solid mass, thereby augmenting the strength or force of the wall. As planned, the building was to combine the features of a work house or room 36 feet square and 140 feet high; a kiln house 28 by 69 feet and--including tower--180 feet high; a storage house 36 by 144 feet and 100 feet high, and a malt house 28 by 68 feet and 100 feet high. The work house was to contain several grain bins; the storage house was to contain 36 rectangular grain bins extending from the basement to the top story, with a carrying capacity of 300,000 bushels of grain; the malt house was to be divided into seven stories with concrete germinating tanks on each floor, having a carrying capacity of 144,000 pounds of grown green malt. The kiln house was to have a carrying capacity equal to that of the malt house. The contract provides that all labor and material shall be furnished by plaintiff. And “all work is guaranteed to be first class.” The contract price agreed upon is the sum of $72,000, and to be paid by defendant in six equal installments as follows: “The first payment when the total walls, interior and exterior, have reached the height of 15 feet above the top of the foundation walls, and one-sixth on the completion of each 25 feet in height of all walls,” etc. In respect of the payments, it is further provided that “should payments become past due, it is to be optional with the contractor to continue or discontinue the work until such payment is made.” August 1, 1905, is fixed as the time when the work is to be completed, and in this connection it is provided that if the building is not completed by the time fixed, a deduction in a sum named shall be made from the contract price for each day of delay. Plaintiff agrees to give a bond in the sum of $25,000 for the faithful performance of the contract on its part, the premium for such bond to be paid by defendant. Other provisions of the contract will be noticed as we proceed.

Plaintiff sues upon the contract, and in its petition alleges that on July 8, 1905, there had been constructed by it the total walls of the building, exterior and interior, so that the same had reached the height of more than 15 feet above the foundation walls, and that this had been done in compliance with the terms and conditions of the contract; that in virtue thereof it became entitled to demand and receive the first installment payment of $12,000 as provided for in the contract. Payment of the sum of $7,775 on account of said installment is admitted. The complaint of the petition is that defendant did and still does neglect and refuse to accede to the demand of plaintiff for payment of the balance of said installment. There is then an allegation that because of such failure to pay, and acting within its right under the contract, plaintiff did on July 8, 1905, exercise its option to discontinue work on the building, and that it has now wholly discontinued work under the contract. And it is said that for work and material furnished under said contract plaintiff became entitled to the sum of $27,775; that deducting therefrom the amount paid as admitted, there is now due to plaintiff a balance of $20,000. The filing of a mechanic's lien is alleged, and judgment and decree is prayed accordingly. The answer denies that the work done by plaintiff, and the labor and material furnished by it, conforms to the terms and conditions of the contract; denies that plaintiff had any right to discontinue work, and alleges that in doing so it committed a breach of the conditions of the contract and abandoned the same; denies that it is indebted to plaintiff in any sum. Further, it is alleged that at the time demand was made upon defendant for the first installment payment, it had paid out from time to time on plaintiff's account freight bills, etc., the total sum of $2,775, which amount was acknowledged by plaintiff to be correct; that in response to the demand of plaintiff for the first installment payment, defendant denied that the same had been earned or was due; “that thereupon an oral agreement was made between plaintiff and defendant, whereby defendant agreed to pay said installment on condition that plaintiff would produce receipted bills for the material used in the building, which plaintiff agreed to do; and under said oral agreement and pursuant thereto defendant made payment of $5,000, and plaintiff has failed to produce any receipted bills or other evidence of payment as agreed upon.” A failure to furnish a bond as required by the contract is alleged, and there is the general allegation that plaintiff “has failed and neglected to comply with the other material conditions and requirements of said contract.” In a counterclaim, defendant alleges that the work done by plaintiff is not first-class as required by the contract, and is not in compliance with the specifications of the contract; that plaintiff did not use the kind or quality of material required by the contract, or in the proportions required, and has abandoned the contract. By reason of all which defendant has sustained and will sustain damages in the sum of $5,000. Payment of the sum of $7,775 to plaintiff is alleged, and it is said that the portion of the building constructed was not worth said sum or any part thereof. And judgment is demanded in the sum of $57,775. In a further counterclaim, defendant points out the provision of the contract respecting failure to complete the building on time and for liquidated damages, and on this account it prays judgment in the sum of $25,000. In a reply filed, plaintiff insists that it was at all times ready and willing to furnish bond as required by the contract, and offered and tendered a bond, but that defendant neglected and refused to pay the premium thereon as by the contract it was obligated to do. Respecting the claimed deviations from the specifications, plaintiff insists that all such were at defendant's suggestion, and with its consent, whereby it is estopped from complaining thereof. Further, that after such changes and modifications as were made had been made, defendant with full knowledge paid plaintiff $7,750 without objection or complaint, and that it thereby waived the same and assented thereto. Further, that in any event defendant is limited to the amount of liquidated damages provided by the contract to be deducted from the contract price in case of failure on the part of plaintiff to perform. The intervener alleges an oral contract with plaintiff under which he furnished sand for the building of the value of $684; alleges the filing of a statement for lien, and demands judgment against plaintiff for the amount due, and a decree of foreclosure.

Going now to the fact situation as disclosed in evidence, we may properly begin by giving consideration to the contention of plaintiff that the failure to complete and deliver a bond was due to the fault of defendant. It seems that Hoyt, plaintiff's superintendent, called upon one Safely, agent at Cedar Rapids for the Ætna Indemnity Company, to arrange for a bond. He (Hoyt) was given an application filled out which he sent to plaintiff in Chicago for execution. It was returned to Hoyt who took the same to Bosch, president of the defendant company. The latter objected thereto because it called for the payment of annual premiums, and he, Bosch, at once consulted one Anderson, agent of another company, who offered to write a bond to cover the contract for one premium payment,--the amount thereof being substantially that required by the Ætna company as an annual premium. An application was prepared by Anderson, and this was sent to plaintiff for execution, and Hoyt was notified of the situation. The application contained a recital that the premium of $160 was to be paid by the applicant. Plaintiff ignored the application because of such recital therein. After plaintiff had abandoned the work, and after this suit had been commenced, it procured a bond to be issued by still another company, paid the premium thereon, and through its attorneys offered to deliver the same to defendant upon payment of the sum of $720 as premium. Defendant did not see it to recognize the offer. In this situation, we think there is no excuse for the failure on the part of plaintiff to furnish a bond as required by the contract. It is the reading that plaintif...