Southern Real Estate & Financial Company v. Bankers Surety Company

• Decision Date: 19 December 1918
• Citation: 207 S.W. 506,276 Mo. 183
• Parties: SOUTHERN REAL ESTATE & FINANCIAL COMPANY, Appellant, v. BANKERS SURETY COMPANY
• Court: Missouri Supreme Court

207 S.W. 506

276 Mo. 183

SOUTHERN REAL ESTATE & FINANCIAL COMPANY, Appellant, v. BANKERS SURETY COMPANY

Supreme Court of Missouri

December 19, 1918

Appeal from St. Louis City Circuit Court -- Hon. Charles B. Davis Judge.

Reversed and Remanded.

Reynolds & Harlan and Lydia Lee for appellant.

(1) The instructions of the court prescribed the rule for measuring the damages in this cause, by which the jury must be guided in arriving at its verdict. The award not being warranted by the rule therein laid down is such evidence of prejudice or mistake as renders it the duty of the court to set aside the verdict. R. S. 1909, sec. 2022; Baylies on New Trials, p 505; Morris v. Railroad, 136 Mo.App. 393; Fischer v. St. Louis, 189 Mo. 579; Watson v Harmon, 85 Mo. 443; Fury v. Merriman, 45 Mo. 500; Pritchard v. Hewitt, 91 Mo. 551; Edwards v. Railway, 82 Mo.App. 485. (2) It is conceded that defendant is released only to the extent to which it is injured by over-payments made to the contractor. Just what constitutes an "overpayment" is the controversy arising upon the instructions on the question of the measure of damages. The correct rule is that stated by the court's instruction given at plaintiff's request, namely, that plaintiff is entitled to recover any amount paid by it for this work in excess of the contract price, subject to credit to the defendant for any amount paid to the contractor in excess of ninety per cent of the value of the work and materials in place in the structure at the time of its abandonment by the contractor. Howard County v. Baker, 119 Mo. 397; Milavetz v. Oberg, 164 N.W. 910; Crudup v. Portland Cement Co., 156 P. 899; National Surety Co. v. Haley, 159 P. 292; Gorton v. Freeman, 152 P. 127; School District v. U. S. F. & G. Co., 152 P. 668; Southwestern Surety Co. v. Lumber Co., 149 P. 1038; British Amer. Tob. Co. v. Surety Co., 164 N.Y.S. 406; Hastings Land Imp. Co. v. Empire State Surety Co., 156 A.D. 258; Welsh v. Warren, 159 S.W. 106. (3) The burden of proving such injury as may have been sustained by it, by reason of the alleged over-payments, is on the defendant surety. Welsh v. Warren, 159 S.W. 106; Lackland v. Renshaw, 256 Mo. 133.

Jeffries & Corum for respondent.

(1) The instruction should have declared the law to be that the defendant was entitled to a credit for any amount the owner paid to the contractor in excess of ninety per cent of the value of work and materials in place with reference to the contract price. In other words, that it was the duty of the architect to ascertain the value of work and materials in place in order to determine what proportion of the contract had been performed, and the owner was entitled to pay the contractor only ninety per cent of the contract price with relation to the proportion of the contract completed and performed. Southern Real Estate & Financial Co. v. Bankers Surety Co., 184 S.W. 1030; Fidelity & Deposit Co. v. Agnew, 152 F. 959; O'Neill v. Title Guaranty & Trust Co., 191 F. 570; Hawkins v. Burrell, 69 App. Div. (N. Y.) 464, 74 N.Y.S. 1003; National Surety Co. v. Long, 79 Ark. 573; Neilson v. Title Guaranty & Surety Co., 159 P. 1151. (2) The effect of the instruction was to declare to the jury that plaintiff was entitled to recover damages, even though the total cost to plaintiff was less than the contract price. Plaintiff could not have suffered damages unless the abandonment of the work by the contractor caused the plaintiff to expend more than the contract price. The instruction either misdirected the jury, or was so directed as to necessarily confuse them in arriving at a correct solution of the issues. Knapp v. Hanley, 153 Mo.App. 169. (3) The court erred in refusing the instruction requested by defendant, for the reason that said instruction correctly declared the law as to plaintiff's measure of damages. Southern Real Estate & Financial Co. v. Bankers Surety Co., 184 S.W. 1030; Fidelity & Deposit Co. v. Agnew, 152 F. 959; O'Neill v. Title Guaranty & Trust Co., 191 F. 570; Hawkins v. Burrell, 69 App. Div. (N. Y.) 464, 74 N.Y.S. 1003; National Surety Co. v. Long, 79 Ark. 573; Neilson v. Title Guaranty & Surety Co., 159 P. 1151. (4) The case had been tried once and had been appealed to this court and this court rendered an opinion holding that the owner was entitled to pay the contractor only ninety per cent of the value of work and materials in place with reference to the entire contract price. Without reference to whether this doctrine should be permitted to stand as the law of the State, it is plainly the law of this case. Armour v. Frey, 253 Mo. 465; Ward v. Haren, 183 Mo.App. 569; Bagnell Tie & Timber Co. v. M., K. & T., 250 Mo. 514; Scott v. Parkview Realty & Imp. Co., 255 Mo. 76; Butz v. Murch Bros. Contr. Co., 137 Mo.App. 222; Vancleve v. St. Louis, M. & S. E. R. Co., 137 Mo.App. 332; Roth Tool Co. v. Champ Spring Co., 146 Mo.App. 1; State ex rel. Shipman v. Allen, 144 Mo.App. 234. (5) The judgment cannot be remanded with direction to enter judgment for the full amount claimed by plaintiff. State v. Frederici, 269 Mo. 695; Johnson v. Grayson, 230 Mo. 394; Tierney v. United Railways Co., 185 Mo.App. 724; McDonald v. Mossman, 181 Mo.App. 476.

WOODSON, J. Walker, Faris and Graves, JJ., concur; Williams, J., concurs in the result; Blair, J., dissents; Bond, C. J., not sitting.

OPINION

In Banc

WOODSON J. --

This is the second time this case has reached this court. The opinion written on the former appeal is reported in the 184 S.W. 1030, which reversed and remanded the cause for another trial.

The facts are practically undisputed, but the contest centers around two legal propositions, which will be presently stated.

When the mandate of this court reached the circuit court the plaintiff filed an amended petition, setting up the building contract entered into between the plaintiff and the E. H. Abadie Company, a contractor, whereby the latter undertook "to provide all of the materials and perform all the work for the steam heating, ventilating and power plant for a hotel and theatre building being erected on the northeast corner of Seventh and Market Streets, in the city of St. Louis," for the sum of $ 60,000, "to be paid in installments on the 15th day of each month of ninety per cent of the work in place during the preceding month, according to the certificate of the architect, the final payment to be made thirty days after the completion of the work included in the contract."

Counsel for the plaintiff correctly states the case substantially in the following language:

"The amended petition plead the bond entered into between the E H. Abadie Company, as principal, and defendant, as surety, and the plaintiff, as obligee, wherein defendant agreed to keep the plaintiff 'harmless and indemnified from and against all and every claim, demand, judgments, liens and mechanic's liens, costs and fees of every description, incurred in suits or otherwise, that might be had against it or against the building to be erected under said contract, including alterations, and to repay to the said plaintiff all sums of money which it might pay to other persons on account of work and labor done, or materials furnished on or for said buildings, by reason of the failure on the part of the said E. H. Abadie Company to pay to said plaintiff all damages it might sustain and all forfeitures to which it might be entitled by reason of the nonperformance or mal-performance on the part of said E. H. Abadie Company of any of the covenants, conditions, stipulations and agreements of said contract including such alterations and additions.' The penalty of the bond is $ 15,000. Said bond further provided that the parties might by agreement make alterations and additions to said contract, provided the additional cost thereof did not exceed $ 5000. Thereafter an amendment to the bond was agreed upon by the parties whereby alterations and additions to said contract might be made to the amount of $ 15,000 without any other or further consent of the surety.

"The amended petition further plead that additions were made to said contract at a cost of $ 8963.98, the partial performance of the contract and the abandonment thereof by the contractor, after payment by plaintiff to said contractor of $ 62,502.50, upon certificates of the architect, and that said amount constituted approximately ninety per cent of the value of the work and materials in place on said building to said time; that thereafter plaintiff paid on account of materials furnished on the order of the contractor and incorporated in the building, to various persons and corporations, the sum of $ 2432.50; that plaintiff paid on account of mechanics'-lien judgments against said building on account of material furnished to said contractor, the aggregate sum of $ 9468.21; that the cost to plaintiff to complete said contract was $ 5607.24; a total cost to plaintiff, over and above the contract price of $ 68,962.98, of $ 11,064.47, for which amount with interest plaintiff prayed judgment.

"Defendant answered, admitting the execution of the contract and bond and the terms thereof, and as an affirmative defense, plead a violation of the provision of the contract in that plaintiff overpaid the contractor. Other affirmative defenses were set out in said answer, but were apparently abandoned by defendant at the trial, as no evidence was offered by defendant, and no instructions were asked save on the question of overpayment to the contractor.

"The defendant offered no evidence at the trial, and that introduced by plaintiff was to the effect that the contract was breached by the contractor; that the money paid the contractor before the breach was ninety per cent or less of the value of the work in place; that all the...