Stewart v. Spalding

• Decision Date: 19 May 1914
• Citation: 71 Or. 310,141 P. 1127
• Parties: STEWART ET AL. v. SPALDING ET AL.
• Court: Oregon Supreme Court

141 P. 1127

71 Or. 310

STEWART ET AL. v. SPALDING ET AL.

Supreme Court of Oregon

May 19, 1914

Department 1.

Appeal from Circuit Court, Multnomah County; W. N. Gatens, Judge.

Suit by A. M. Stewart and another, copartners doing business under the firm name of James Stewart & Co., against Z. S. Spalding and others. From a decree for plaintiffs, they appeal, and defendants Z. S. Spalding and others bring a cross-appeal. Reversed, and suit dismissed without prejudice.

This is a suit in equity for the recovery of $56,602.39, and for the foreclosure of a lien therefor for labor and material upon a building and the grounds upon which it stands, in the city of Portland. There was a decree for the plaintiffs in the court below. The plaintiffs appeal, and Z. S. Spalding, the Spalding Company, and the Northwestern Mutual Life Insurance Company, defendants, also appeal from parts of the decree of the court below. The facts appear in the opinion of the court.

Wirt Minor, of Portland (Teal, Minor & Winfree, of Portland, on the brief), for appellants. Wilbur & Spencer, of Portland, for Spalding and others. W. L. Boise and J. T McKee, both of Portland, for Northwestern Mut. Life Ins. Co. Claude Strahan, of Portland (C. A. Sheppard, of Portland, on the brief), for defendants.

RAMSEY J.

On the 3d day of February, 1912, the plaintiffs filed their amended complaint in this suit, and this pleading will be referred to herein as the complaint. The plaintiffs and Z. S. Spalding entered into a written contract, bearing date of July 29 1909, for the construction, by the plaintiffs for the defendant, of a large building upon lots 3 and 4 in block 47 of the city of Portland (except the interior finish and vault of the banking room and such other parts or items as are specifically excepted in the drawings and specifications) and all the material and work in said building was to be furnished as shown by the drawings and described in the specifications prepared by Cass Gilbert, architect, which drawings and specifications were identified by the parties to said contract, and made a part thereof. In said contract it was provided, inter alia, that alterations might be made in the work and in said building to be erected, and that, if such alterations should be made, the plaintiffs should provide all the materials and perform all the work therefor.

By said contract the plaintiffs agreed to provide all materials and perform all the work for the general construction of said building. By said contract it is provided, among other things, that the sum to be paid by the defendant Z. S Spalding to the plaintiffs for said work and materials should be $482,314, plus the contractors' commission of $38,000; the total of said two items being $520,314.

It was provided, also, by said contract, that if the plaintiffs should be able to secure lower prices, bringing the total cost of said materials and labor less than the said sum of $428,314, without modifying the quality or extent of the material or labor, then, for any such reduction below the sum of $482,314 that should be made upon the cost of items, specified at the time of said contract as included in said sum, there should be paid to the plaintiffs, by said Z. S. Spalding, an extra commission of 10 per cent. on the amount saved to the owner, subject, however, to additions and deductions, as provided in said contract; and that said sum should be paid by said Z. S. Spalding to the plaintiffs in current funds, and only upon certificates of the architect, as follows, that is to say: In monthly payments based upon the estimated value of materials and labor incorporated in said building, less 10 per cent., which should be retained until completion, and should be made a part of the final payment, said estimates to be subject to the approval and certification of the architect, the plaintiffs' commission also to be paid in installments, based upon the value of the material and labor incorporated in said building, as certified by the architect, and that, should the contractors earn extra commission, as provided by said contract, said commissions should be paid in the final settlement, the plaintiffs to submit all proposals, estimates, bids, and bills of subcontractors on work, whenever requested by the architect or owner, and to submit monthly statements to the architect, showing the amount of material and labor incorporated, and the amount paid for the same, the final payment to be made upon satisfactory completion of the work included in the contract, and all payments to be due when certificates for the same were issued.

After alleging, in substance, the foregoing facts, the complaint alleges also that, in pursuance of said contract, the plaintiffs did provide all the materials and performed all the work for the construction and completion of said building, and provided said materials and performed said work, as shown by the drawings and described in the specifications, made a part of said contract, and have done and performed all things which the plaintiffs agreed to do in and by the terms of said contract.

The complaint alleges also that a number of alterations were made in the materials to be used and the work to be done in the construction and completion of said building, in accordance with the terms of said contract, and that the plaintiffs provided all the material and work for such alterations, in pursuance of said contract.

The complaint alleges also that at the date of the execution of said contract the defendant Z. S. Spalding was the owner and reputed owner of the lands on which said building was constructed, and of the building which the plaintiffs constructed thereon, until after the plaintiffs had commenced the execution of said contract, and had provided a large quantity of materials and performed a great deal of labor for the construction and completion of said building, and until he conveyed said lands and the building being constructed thereon to the defendant, the Spalding Company, and that since said conveyance the Spalding Company, trustee, has been the owner and reputed owner of said lands and said building.

The complaint alleges that, pursuant to said contract, the plaintiffs provided materials and performed labor in the construction and completion of said building of the reasonable value of $451,888.88, and that said materials provided and labor performed were provided and performed in pursuance of said contract, and were actually provided and performed in the construction and completion of said building, upon the lands above described, and the said materials were used in the construction and completion of said building, and the said labor performed in the construction and completion of said building.

The complaint alleges also that, in addition to said sum of $451,888.88 for the materials provided and labor performed for the construction of the building, the plaintiffs are entitled, in pursuance of said contract, to commissions as fixed by said contract, amounting to $38,000.

The complaint alleges also that alterations were made in said building, and that the plaintiffs provided the materials and labor for constructing and completing said alterations, in pursuance of said contract, and that the actual cost of such alterations so made was $62,983.18, and that the plaintiffs actually provided said materials and performed said labor in constructing said alterations, in addition to the sum paid for materials provided and labor performed in the construction and completion of said building, in pursuance of the original contract, and the amount to be paid for such alterations and changes was agreed on by and between said Z. S. Spalding and the plaintiffs in pursuance of said contract at the sum of $62,983.18, plus a commission to the plaintiffs upon the value of materials and work in said alterations and changes agreed upon by and between the plaintiffs and said Z. S. Spalding at the sum of $6,352.85.

The complaint alleges also that the plaintiffs were able to secure lower prices than those contemplated by said contract, and that the total amount thereby saved, in the construction of said building, was $30,425.12, and they claim that they are entitled to receive for their services a commission upon said sum amounting to $3,044.51. The total amount paid them for constructing said building and for commissions by Z. S. Spalding or the Spalding Company was $505,665.03, and they allege that there is still owing them a balance of $56,602.39.

On February 3, 1911, the plaintiffs filed with the county clerk of Multnomah county a claim for a lien upon said building and said grounds to secure the payment of said sum of $56,602.39. This claim will be referred to more fully infra.

The amounts claimed by the plaintiffs as commission for their services in connection with the construction of said building aggregate $47,394.51. The plaintiffs contend that they are entitled to a lien for said sum of $56,602.39 upon said building and grounds, under the laws of this state allowing persons liens for material and labor furnished for the construction of buildings. This claim of lien was recorded on the 3d day of February, 1911, on page 180 of book R of Records of Mechanics' Liens for Multnomah county. This suit was commenced to foreclose said lien for $56.602.39, and for $5,000 as attorney's fees in said suit, and for $3.40 paid the clerk for recording said claim of lien. The complaint sets forth a copy of said contract and a copy of said claim of lien.

The answer of Z. S. Spalding and of the Spalding Company denies much of the complaint, and sets up a large amount of affirmative matter. Said answer admits that Exhibits A and B annexed to the complaint are true copies of the contract referred...