Sweeney v. Lewis Const. Co.

• Decision Date: 04 January 1912
• Parties: SWEENEY v. LEWIS CONST. CO. et al.
• Court: Washington Supreme Court

119 P. 1108

66 Wash. 490

SWEENEY v. LEWIS CONST. CO. et al.

Supreme Court of Washington

January 4, 1912

Department 2. Appeal from Superior Court, King County; John B. Yakey Judge.

Action by Bo Sweeney against the Lewis Construction Company and others. Judgment for plaintiff, and defendants appeal. Reversed and remanded.

Harold Preston, Leander T. Turner, and Sandford C Rose, for appellants.

Dorr &amp Hadley, for respondent.

CROW J.

Action by Bo Sweeney against Lewis Construction Company, a corporation, W. H. Lewis, and Charles S. Wiley, to recover damages for breach of an alleged contract. The trial court made findings and entered judgment in plaintiff's favor for $30,500. The defendants have appealed.

After trial and prior to entry of judgment, the death of Charles S Wiley was suggested. Thereupon Clifford Wiley, his administrator, was substituted as party defendant and now joins in the prosecution of this appeal. The respondent, Bo Sweeney, is the owner of four lots in block 62 of Kidd's addition to the city of Seattle. These lots, located on what is known as North Beacon Hill, were at so great an elevation that it was considered that they and all other property in that immediate neighborhood would be improved and advanced in value by regrading to a lower level. The appellant W. H. Lewis and Charles S. Wiley, now deceased, purchased a number of lots in the same locality, and about the year 1903 had a contract with the Seattle & Montana Railway Company to fill tidelands, which contract they were performing by sluicing earth from their Beacon Hill lots and other property. In May, 1904, Lewis, Wiley, and L. T. Turner, their attorney, organized the appellant corporation, Lewis Construction Company, with a capital stock of $2,000, divided into 100 shares of the par value of $20 each. Lewis and Wiley subscribed for 49 shares each, and Turner subscribed and paid for 2 shares. Lewis and Wiley paid their stock subscription by transferring to the corporation their sluicing plant, which was of a greater value than $2,000. Thereafter the sluicing and regarding was done by the Lewis construction Company, under a subcontract from Lewis and Wiley, who collected 15 cents per cubic yard from the railroad company, and paid the construction company from 5 to 10 cents per cubic yard for doing the work. About the same time, Lewis and Wiley organized another corporation known as the Beacon Place Company, with a capital stock of $12,000, and in payment of their stock subscriptions transferred to it their North Beacon Hill real estate of that value. The regrading operations on North Beacon Hill extended over platted streets and private property of other parties in the neighborhood. For this purpose it became necessary to obtain permits from the city and owners of abutting property. At first permits and licenses, together with the right to use city water, were obtained in the name of Lewis, but later in the name of the Lewis Construction Company which in its operations, without the formality of any written transfer, used those obtained by Lewis. That portion of North Beacon Hill involved in this action had platted streets running east and west, named from north to south as follows: Lane street, Dearborn street, Charles street, and Norman street. A portion of Dearborn street was condemned about the time the improvements here involved were under consideration. There were also cross-avenues running north and south, named from west to east as follows: Tenth Avenue South; Eleventh Avenue South, and Twelfth Avenue So. Respondent's lots fronted on the south side of Charless street and the west side of Eleventh Avenue South, near the center of the district. On February 15, 1906, ordinance No. 13,320 of the city of Seattle was approved. This ordinance provided for widening, extending and establishing Dearborn street, for changing and lowering its grade, the grade of Tenth Avenue South, and the grades of other streets, and for condemning and damaging property necessary for these purposes. While this ordinance affected other streets and avenues, it did not establish any grade for Charles street, Eleventh Avenue South, or Twelfth Avenue So. The grades thus established for Dearborn street and Tenth Avenue South within the district mentioned called for cuts of at least 100 feet: at some points more, at others less. We need not give exact figures. The cuts were to be very deep. About the time these street grades were adopted, there was a general discussion and consideration by city officials and property owners, including parties to this action, of the advisability of a general regrade of the North Beacon Hill district. Appellants were desirous of lowering the level of property owned by the Beacon Place Company, and also of obtaining earth to be used by the Lewis Construction Company in filling the tidelands. Respondent also seems to have been desirous of having the grade of his lots and the adjoining streets lowered to correspond with the adopted grades of Dearborn street and Tenth Avenue South, if done without expense to him, and within a definite time. Considerable negotiation occurred between respondent and Lewis and Wiley, officers of the appellant Lewis Construction Company. The construction company submitted and suggested to respondent written offers running to it from him. None of them were satisfactory to respondent. On April 16, 1906, respondent prepared and delivered to appellant Lewis Construction Company the following proposal, which he now claims is the contract on the breach of which this action is predicated: 'April 16, 1906. Lewis Construction Co., Seattle, Washington--Gentlemen: Replying to your communication of the 12th inst., I wish to say that I am desirous that Charles street between Tenth and Twelfth avenues be reduced to the same grade as Dearborn street, as provided for in ordinance No. 13,320 and also of Eleventh avenue to the same grade as Tenth avenue, as provided in said ordinance No. 13,320. I therefore wish to advise you that if the same shall be reduced to grade as above indicated, and thay my lots numbered one, four, five, and the north one-half of lot two, and the south one-half of lot three, in block sixty-two, Kidd's addition to the city of Seattle, are at the same time reduced to the same grade, as the streets above named, I shall and will waive all claims for damages to said property; provided however, that said grading is done and completed on or before January the first, 1907. Yours truly, Bo Sweeney.' This offer was not acceptable to the appellant construction company to which respondent was to make no payments for lowering the grade, but a few days later Mr. Lewis telephoned respondent that he thought it would be satisfactory. Immediately thereafter the appellant construction company entered upon respondent's lots and the adjoining streets, and by sluicing lowered their grade to a considerable extent, but far short of the grades of Dearborn street and Tenth Avenue So. Respondent had some small tenement houses upon his lots, which he claims were so completely damaged by the regrading as to render them worthless and unfit for occupancy. Shortly before January 1, 1907, the appellant construction company ceased the work of regrading and thereafter refused to continue. Respondent prosecuted this action for the breach of the contract, not only against the appellant construction company, but also against Lewis and Wiley individually; his contention being that he never knew of the existence of the construction company, that he understood he was dealing with Lewis and Wiley, and that he looked to them only. Appellants claim he dealt with the corporation. The trial judge substantially found the corporation was a pretense and subterfuge, that appellants Lewis and Wiley were the contracting parties, and entered judgment against them as well as against the corporation.

The record is voluminous, and we cannot within the limits of an opinion of reasonable length state the evidence in detail. We conclude, however, that respondent was dealing with the corporation only. His letter was addressed to it. The proposals previously drafted by it and submitted to him for his signature were also addressed to the corporation. Attached to one of them was a blank form of acceptance reading as follows: 'The foregoing is acceptable to us, and we agree to the conditions therein contained. Lewis Construction Company, By _____, President.' It clearly appears from the evidence that the Lewis Construction Company was regularly incorporated under the laws of this state; that its stock was fully subscribed, paid, and issued; that its articles of incorporation were of record in the office of the auditor of King county; that a list of its officers was also certified to and filed with the county auditor; that permits were granted it by the city of Seattle; and that it did the regrading on North Beacon Hill at all times after its incorporation. While it is true that respondent talked with the individuals Lewis and Wiley, they were officers of the corporation which could act only through them. The respondent could not talk to the entity known as a corporation. Lewis and Wiley claim they represented the corporation as its officers. Every writing that passed between the parties prior to the commencement of the work mentioned the corporation as the contemplated contracting party. The respondent himself prepared and addressed the identical letter on which he predicates this action. The evidence shows him to be an attorney of active practice. The name used by him in addressing his letter should have challenged his attention. There is no evidence of any investigation on his part as to who constituted the Lewis Construction Company, or whether it was a...