Schutt Realty Co. v. Mullowney

• Decision Date: 11 June 1943
• Docket Number: No. 33342.,33342.
• Citation: 215 Minn. 340,10 N.W.2d 273
• Parties: SCHUTT REALTY CO. et al. v. MULLOWNEY et al.
• Court: Minnesota Supreme Court

10 N.W.2d 273

215 Minn. 340

SCHUTT REALTY CO. et al. v. MULLOWNEY et al.

No. 33342.

Supreme Court of Minnesota.

June 11, 1943.

Rehearing Denied July 1, 1943.

Appeal from District Court, Hennepin County; A. W. Selover, Judge.

Action by Schutt Realty Company and others against John J. Mullowney, doing business as Empire Wrecking & Salvage Company, and others to recover liquidated damages for failure of defendants to wreck a building within stipulated time. From an order denying defendants' alternative motion for judgment or a new trial, after directed verdict for plaintiffs, defendants appeal.

Affirmed.

Fowler, Youngquist, Furber, Taney & Johnson and Victor M. Petersen, all of Minneapolis, for appellants.

Robert Cowling, of Minneapolis, for respondents.

JULIUS J. OLSON, Justice.

This was an action to recover stipulated damages by reason of the failure of defendant Mullowney to wreck within a stipulated time the old and massive structure known as the "Exposition Building" in Minneapolis. It has an interesting history, especially to the "old-timers" of that city. An article appearing in Vol. 1 of the "History of Minneapolis," by the Reverend Dr. Marion D. Shutter, at pages 146-149, describes this unusual building in an interesting and instructive way. In another article, comparatively recent, which appeared in the Minneapolis Times Tribune of January 12, 1940, at page 15, many facts about the building are recited. We shall not cover them all, but we give a few brief excerpts from this article which are of historical significance.

The Exposition Building, built in 1885, was a huge structure, located "at the north end of the Third avenue bridge." It contained a floor area of 367,500 feet, and was at the time of its erection "acclaimed as the greatest engineering feat west of Chicago." It "was Minneapolis' pride and joy and ostensibly thrived, but it proved to be a financial flop, and at the end of eight years its doors were closed." It was the place where "Benjamin Harrison was renominated for the presidency in the 1892 Republican convention and President McKinley stood at the north entrance and gave the nation's welcome to the homecoming 13th Minnesota Regiment" in 1899. During the eight years of its existence as an exposition building, its "rafters rang [with] the voices of Patti, Nordica, Campanari and Melba and the waltz melodies of the famous Johann Strauss orchestra."

Some 500 tons of metal radiators, pipes, and beam joists were estimated to be within its walls. It covered an area of about 90,000 square feet, the dimensions of the main structure being approximately 266.8 x 326.3 feet. The grounds upon which it was built had an area of about 5½ acres. The walls, which were of brick and stone, were about 2½ feet thick. It was considered "Minneapolis' biggest wrecking job." Defendant Mullowney, a contractor of many years' experience in the wrecking business, undoubtedly recognized the risks involved.

The parties to the wrecking contract employed simple and direct language in expressing the terms of their agreement. We find nothing in it indicating room for difference of opinion as to what was to be done and the time within which the work was to completed. The contractor agreed to pay, and in fact paid, $4,000 to plaintiffs, the owners of the property, for the value of the material salvaged. This, plus the work of wrecking and cleaning up the premises, constituted the contract price for the job.

The contract provisions giving rise to this litigation are paragraphs VI and IX. (Plaintiffs are the first parties therein and Mullowney the second party.) These paragraphs read:

"VI. Second Party agrees to complete the wrecking and leveling as herein provided for of the northerly one-half of said building within five (5) months from the date of the execution of this agreement, and possession of that part of said premises and the street frontage thereto shall be surrendered to the First Parties in a completed condition within said time. Second Party agrees that the entire operation to be performed by the said Second Party as herein provided shall be completed within ten months from the date of the execution of this agreement."

"IX. The Second Party further agrees that, in the event he fails to complete either the whole or any part of the operations herein agreed by him to be performed within the times specified herein, he will forfeit to the First Parties the sum of $1,000.00, for each and every month or major fraction thereof which shall elapse from and after the time herein set for the completion of said part of said work in default, as liquidated damages for said default and to cover any loss which may be occasioned to the said First Parties by reason of said failure, and that this agreement on the part of said Second Party shall be made one of the conditions which are guaranteed by the surety bond hereinbefore referred to."

To guarantee "the full and complete performance" of the contract, the contractor agreed to furnish, and did so furnish and provide, a surety performance bond for $10,000. Defendant surety company is such surety.

That this structure had long ago outlived the use for which it was originally intended and designed cannot be doubted. As pointed out in the Times Tribune article to which we have referred: "The building remained vacant for many years except for use for an occasional concert or meeting. In 1903, the National Stock Food Co., owned by the M. W. Savage interests, occupied the structure and remained until 1917, when the government took it over to train student soldiers. It was returned to the Savage company in 1920 and sold in 1935 when the company liquidated. It has been vacant since."

Because of the increase in the population of the city from 100,000 in 1885, when the Exposition building was erected, to 492,370 in 1940, there was a large and natural expansion of the business centers of the city. The locale of the Exposition building became "a shopping center" instead of a show place for agricultural or industrial products. A large area of potentially valuable property lay unused because this massive, unwieldy, and wholly unsuitable building occupied the site. The steadily growing demands of population and business and the progress of the city required that the building and its site be adapted to the commercial needs of the community. Accordingly, the owners, as foresighted businessmen, undertook the project of wrecking it and for this purpose entered into the agreement here involved.

At the conclusion of the trial the parties severally moved for a directed verdict. Plaintiffs' motion was founded upon the claim that, since the evidence showed that Mullowney had failed to comply with the terms of his contract in respect to timely performance and no extension of time or other modifying...