Schwartz v. Shelby Const. Co.
| Decision Date | 12 September 1960 |
| Docket Number | No. 2,No. 47854,47854,2 |
| Court | Missouri Supreme Court |
| Parties | Meyer SCHWARTZ, doing business as Meyer Schwartz Plumbing Company, Plaintiff-Appellant, v. SHELBY CONSTRUCTION COMPANY, Inc., a corporation and New York Life Insurance Company, a corporation, Defendants-Appellants, I. R. Goldberg Plumbing Supply Company, a corporation, Independent Plumbing & Heating Supply Company, a corporation, Fidelity and Deposit Company of Maryland, a corporation, and Dorothy E. Gildehaus, Administratrix of the Estate of M. F. Gildehaus, deceased, formerly doing business as M. F. Gildehaus Plumbing & Heating Company, Defendants-Respondents |
Shifrin, Treiman, Agatstein & Schermer, St. Louis, for Meyer schwartz.
R. H. McRoberts, St. Louis, A. H. Kerth, Clayton, for Shelby Const. Co., Inc., and New York Life Ins. Co., Bryan, Cave, McPheeters & McRoberts, St. Louis, Kerth, Thies & Schreiber, Clayton, of counsel.
Samuel H. Liberman, Lewis, Rice, Tucker, Allen & Chubb, St. Louis, for I. R. Goldberg Plumbing Supply Co.
Oliver F. Erbs, Clayton, for Independent Plumbing & Heating Supply Co.
Herbert E. Barnard, Barnard & Timm, St. Louis, for Fidelity Deposit Co. of Maryland.
J. J. Brinkman, Richard M. Stout, St. Louis, for Gildehaus.
This action is an equitable mechanic's lien suit instituted initially by a subcontractor against the general contractor, the record owners, the holder of deeds of trust, other lien claimants, and certain unnecessary parties who were later dropped. Plaintiff sought recovery in quantum meruit of $205,274.18, with interest from May 9, 1951, against the general contractor Shelby Construction Company, Inc., a Louisiana corporation, and a lien against the real estate. A second count in tort was dismissed. Independent Plumbing and Heating Supply Company and M. F. Gildehaus were joined as lien claimants; they filed answers and cross bills seeking judgments against plaintiff and adjudications of their liens. On motion of Shelby, I. R. Goldberg Plumbing Supply Company, a Missouri corporation, and Fidelity and Deposit Company of Maryland, a corporation, were added as parties defendant. We shall often refer to these various parties, individual and corporate, by means of obvious abbreviations. Shelby filed a counterclaim against plaintiff and a cross-claim against Goldberg for damages aggregating $1,779,050.48, for breach of contract. Fidelity had executed a performance bond for plaintiff (and Goldberg) and Shelby cross-claimed against it for $810,000 on the bond. No point is made here on the pleadings, as such, and we shall not review them.
In early 1949 Shelby became interested in constructing a large apartment project in St. Louis County as an FHA project. It opened temporary offices in St. Louis and began negotiations with the FHA (Federal Housing Authority), and employed architects, draftsmen and others. It submitted various tentative plans and, when FHA approval became certain, it purchased in its own name the substantial tract of land in question, taking title on January 30, 1950. Somewhat out of order we note here the following: On March 17, 1950, Shelby filed a plat of the subdivision; the development was known as Audubon Park Apartments, and it consisted of 1,392 apartment units in 219 separate buildings; the property is located in the City of Brentwood. On March 22, 1950, articles of incorporation were filed for four so-called 'Bird Corporations,' designated, respectively, as Bluebird Homes, Inc., Canary Homes, Inc., Cardinal Homes, Inc., and Peacock Homes, Inc. Certificates of authority to do business were issued to each of these corporations on March 29, 1950. The Shelby Corporation owned (as of all material dates) all capital stock of these corporations except for 100 shares of Class A preferred of each corporation, par value, $1 per share, which was issued to the FHA, apparently as a requirement of the loan agreement or the appropriate regulations. The incorporators and officers of each corporation were officers of Shelby. On March 30, 1950, Shelby conveyed to each of these four corporations a separate portion of the land involved. On April 5, 1950, each of these corporations executed notes and a deed of trust, the respective amounts varying from $2,473,000 to $3,667,400, and aggregating $11,163,200; these were all assigned to defendant New York Life Insurance Company at varying dates in 1951. On April 5, 1950, each of these corporations entered into a contract with Shelby as general contractor for the construction of the housing units, as per certain plans and specifications.
On or about March 22, 1950, Shelby furnished to Meyer Schwartz, a relatively small plumbing contractor of St. Louis, a set of plumbing plans for the project. These are often referred to by plaintiff as the 'bid plans'; essentially they showed in a general way the things to be accomplished, such as the location of fixtures, but not the detailed installations, measurements, etc.; they have been referred to as 'diagrammatic' plans. These plans omitted many features shown in the later and complete plans. At approximately the same time plans were submitted to various other plumbing contractors. Plaintiff had been brought into the picture by Frederick Goldberg of St. Louis, President of two defendant corporations, who had first contacted Mr. Kapelow, President of Shelby, in an effort to sell plumbing material for the project. Plaintiff submitted a bid of $830,000 in April 1950, based on these 'bid plans' and sundry interviews with the Shelby people. Hearing nothing further, he became somewhat disgusted and turned in his plans. Negotiations were resumed a little later, and these resulted in the controverted subcontract of May 16, 1950, between Shelby and plaintiff for all plumbing work on the project at a total price of $810,000. This was the largest single subcontract on the job. However, Shelby, doubtful of plaintiff's financial responsibility, insisted that the Goldberg Company execute the contract with plaintiff; this it did in effect, but by means of a separate contract in which it 'completely undertook' the obligations of Schwartz in his contract.
Paul Kapelow was President of Shelby; one Charlie Kornman was Vice-President; Lester Gross, a lawyer of St. Louis, acted as its counsel and, in fact, handled much of the administrative work on this job. No question of lack of authority on the part of any of these men has been raised. The completed plans for the FHA were assembled by April 11, 1950, and dated as of that date; the commitment of the FHA was made on April 18, 1950. During March, April and May many conferences were held between plaintiff and Goldberg on the one hand and the various officers of Shelby on the other, concerning the job, the specifications and many details of the plumbing work. The job was repeatedly represented as one for mass production and 'prefabrication,' with eight basic building units to be repeated over and over, and requiring speed in all phases. There is much argument here about the reasons for the failure of plaintiff to 'prefabricate' his installations to a greater extent. 'Prefabrication' refers to the method of assembling in advance, usually in a shop located right on the job, such pipes and fittings as are uniform in the various buildings and may be uniformly, installed; this is generally done by designated men who become practiced in that process. The subsequent installation of such an assembly in its designated place in any building is supposedly hastened, and it seems to be agreed that this process, when permissible, saves labor, time and money.
Plaintiff's suit here is in quantum meruit, as already stated. Shelby seeks to hold him strictly to the contract insisting that he and Goldberg breached it, and it asks very substantial damages. As damages Shelby claims: the entire amount paid another plumbing contractor for completing the job; the cost of carpenter work supposedly performed on plaintiff's behalf; and sundry consequential damages which it insists were caused by plaintiff's delays, including loss of rents, additional interest, overhead, increased and additional wages, etc. In answer to all this, plaintiff and Goldberg say that the contract was induced by fraudulent representations, and, moreover, that it was abandoned by mutual consent as evidenced by the acts of all parties. Much evidence was devoted to the oral negotiations. Plaintiff was not furnished at any time a set of the FHA (complete) plans. He asked for further plans; he and Goldberg testified that they were told that none were available, and also that they had seen the plans. Shelby denied all this, and insisted that the completed plans were available after April 18, and that, in fact, plaintiff and Goldberg examined parts of them from time to time and worked with Shelby on the plumbing specifications. In plaintiff's contract, by virtue of a typed rider prepared by Gross, he agreed to perform 'as specified in the plans and specifications * * *' following which there appear references to numerous pages; these references are largely to pages of the separate plans of each of the four corporations. Plaintiff testified that he thought these were merely his 'bid plans' elaborated to apply to each separate corporation. We have concluded that there was nothing which actually prevented plaintiff from examining the FHA plans, but that he was never furnished an assembled set; that such would have shown vital elements missing from his 'bid plans'; and that the completed plans were somewhat scattered in the general disarray of a large and complicated job. Shelby contends that the FHA plans are those referred to in the contract and that Goldberg helped to pick out the necessary pages for reference. Indeed, it claims that the bid plans, obviously incomplete, were only furnished to the plumbers so that...
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...Openings, 819 S.W.2d at 349. Finally, the Court agrees with Dunn that the Missouri Supreme Court's opinion in Schwartz v. Shelby Construction Company, 338 S.W.2d 781 (Mo.1960), sheds some light on this situation favorable to Dunn's position. While it contains no express holding on the point......
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