Ward v. Town Tavern

• Decision Date: 28 February 1951
• Citation: 228 P.2d 216,42 A.L.R.2d 662,191 Or. 1
• Parties: , 42 A.L.R.2d 662 WARD v. TOWN TAVERN et al.
• Court: Oregon Supreme Court

Page 216

228 P.2d 216

191 Or. 1, 42 A.L.R.2d 662

WARD v. TOWN TAVERN et al.

Supreme Court of Oregon.

Feb. 28, 1951.

William L. Dickson and Arthur H. Lawis, of Portland, (McCarty, Dickson & Swindells, of Portland, on the brief), for respondent.

John F. Reynolds, of Portland (Pedersed & Reynolds, of Portland, on the brief), for appellant.

Before LUSK ^*, C. J., and BRAND ^**, ROSSMAN, HAY and LATOURETTE, Justices.

ROSSMAN, Justice.

This is an appeal by one of the two defendants, Town Tavern (a corporation), from a decree of the Circuit Court which (1) affirmed and adopted findings of fact and conclusions of law rendered by Honorable Herbert C. Hardy, referee, before whom the cause was tried; (2) dismissed the cause as to the other defendant, Pittock Block Inc.; (3) awarded judgment to the plaintiff against the defendant, Town Tavern, in the following sums: $6,350.49 as the balance due the plaintiff for work and materials furnished to the defendant; $2.25 for filing and recording the plaintiff's lien notice; $5, cost of the preparation of the lien notice; $1,850 as compensation for the plaintiff's attorney; and $850 as compensation for the referee; and (4) sustained the validity of the plaintiff's lien and ordered its foreclosure.

The defendant-appellant presents the following assignments of error:

'The court erred in refusing to dismiss the suit.'

'The court erred in entering a personal judgment against defendant-appellant.'

'The court erred in allowing full recovery to respondent' [plaintiff].

'The court erred in allowing respondent to recover costs and attorney fees.'

'The court erred in refusing to give judgment to defendant-appellant on its counterclaim.'

The plaintiff (sole respondent) is a building contractor. The defendant, Town Tavern (sole appellant), operates a restaurant in leased portions of an office building in Portland owned by the defendant, Pittock Block, Inc. After the latter had filed an answer which set forth grounds of nonliability, the plaintiff confessed the averred facts and made no attempt to establish any liability on the part of that defendant. As we have indicated, the attacked decree dismissed the suit as to Pittock Block, Inc., and from that part of the decree no appeal has been taken. Hereafter, when we employ the term 'defendant', we will mean Town Tavern.

In the early part of 1947 the defendant wished to alter the premises occupied by its restaurant and also to incorporate into them two adjacent store rooms and some additional basement space, all of which it had acquired under lease. A firm of store designers, entitled Rink and Hoffmann, prepared plans and specifications which outlined the proposed improvements. Before the plans had taken their final form, some estimates were obtained. June 10, 1947, the plaintiff and the defendant signed a contract which bound the plaintiff to perform the work 'as shown by the plans, drawings and specifications prepared for the job by Messrs. Rink and Hoffmann.' The undertaking included, in addition to the demolition of some existing partitions and structural parts, other work such as carpentry, plumbing, painting, wiring, plastering and cement work. No specified day was fixed for the completion of the job, but the contract said: 'Said alterations and repairs shall be commenced within fifteen days hereafter and shall be prosecuted to completion with all due diligence. However, the contractor shall not be responsible for delays in the progress or completion of said alterations and repairs which are occasioned through no fault or neglect of his * * *.'

Much time was consumed during the trial concerning the defendant's liability or nonliability for performing work not shown in the plans and known as extras. Concerning that phase of the dispute, the contract contained this provision: 'Any and all changes or alterations or extras in the alterations or repairs that are not shown by the plans and specifications first furnished to the contractor shall be authorized by a letter or other writing directed by the owner or Rink and Hoffmann, Store Designers, to the contractor and acknowledged in writing by the contractor or his superintendent or foreman on the job, and the owner shall pay for the same on the same basis as herein provided for the original work.'

The following is the part of the contract which governs the amount to be paid to the plaintiff: 'All of the alterations and repairs made and the work done shall be paid for by the owner to the contractor at the contractor's cost plus an amount equal to 15% thereof except for the plumbing, wiring and painting. The owner shall pay the contractor for the plumbing, wiring and painting an amount equal to the subcontractor's price plus an amount equal to 10% of said subcontractor's price. The contractor's cost shall include the following: * * *.'

After the execution of the contract, the plaintiff promptly began his undertaking. At the outset, while walls were being demolished and other phases of the project were under way, the restaurant remained in operation, but later, as contemplated, it closed while other parts of the work were being performed. When the contract was signed, the parties surmised that two weeks' shutdown for the restaurant would suffice. However, it was forced to remain closed four weeks. October 2, 1947, the plaintiff claimed that he had completed his work and shortly presented to the defendant a statement of account which totaled $27,471.85 less $19,241.29 paid to him during the progress of the work. The total was more than had been anticipated. The increased cost was due, in part, to the incompleteness of the plans, unanticipated difficulties that were encountered, many changes in the work that the defendant ordered and additional work performed at its request.

Toward the close of the undertaking ill will was engendered between the parties, the blame for which each attributed to the other. As a result of that development, the plaintiff did not fell at liberty to return his workmen to the restaurant after the completion of the work to trim an occasional door or transom that stuck and to make adjustments to plumbing and other installations that failed to function properly. The lack of that follow-up attention did not enhance the defendant's appraisal of the work. The account was not paid, and presently the plaintiff filed a notice of a mechanic's and materialman's lien, §§ 67-101 to and including 67-113, O.C.L.A., which stated that in performing his services the plaintiff had earned $27,471.85 and had credited the account with $20,570.44. It showed a balance of $6,901.41 was due the plaintiff.

The cause which underlies this appeal arose when the plaintiff filed his complaint which, omitting mention of formal matters, alleged (1) the contract, as well as requisitions by the defendant for extra items, their performance by the plaintiff, the fact that the plaintiff earned in the manner just indicated $27,471.85, that there was credited on the account $20,570.44 and that a balance of $6,901.41 remained unpaid; (2) that (a) the plaintiff filed a notice of a mechanic's and materialman's lien which, after stating the condition of the account, showed a balance of $6,901.41 remained unpaid, (b) the plaintiff had paid $2.25 for filing the lien notice and $5 for having it prepared, and (c) the plaintiff had notified the defendant of the filing of the lien and of his intention to foreclose it. The complaint closed with a prayer for (1) judgment for the aforementioned sums of $6,901.41, $2.25, $5 and an attorney's fee of $3,000; (2) a decree for the establishment of the lien; and (3) an order for the foreclosure of the lien. Specifically, the estate or item of property upon which the plaintiff sought to impose his lien is thus designated in the complaint: 'against the leasehold interest of each and both of the defendants in and to the land hereinabove described, and against said office building, the Pittock Block, constructed thereon, and against the interest that said defendant, Town Tavern, has in and to said above described land and said office building'.

The answer, apart from admitting the status of the parties, the execution of the contract and that the plaintiff performed 'certain labor and furnished certain materials,' denied all other averments. In addition, it submitted three 'further, separate, affirmative answers.' The first of these averred that the plaintiff 'did not diligently pursue' his contract, with the result that the defendant was damaged in the amount of $2,100. The second alleged that the reasonable value of all of the work and materials furnished by the plaintiff did not exceed $15,000 and that the defendant had paid on account $20,570.44, thus overpaying the amount for which it was liable, $5,570.44. The third stated that in the performance of his work the plaintiff used 'inferior materials and workmanship and negligently and improperly performed various parts of the work,' to the damage of the defendant in the amount of $3,000. The prayer of the answer demanded that the complaint 'be dismissed and that this court to make and enter a decree adjudging that the plaintiff has no lien against the premises occupied by this answering defendant * * * and that this court do further give and grant to this answering defendant a judgment upon its first, affirmative answer and defense in the amount of $2,100 and for a judgment in the amount of $5,570.44 upon its second affirmative answer and defense and a further judgment in the amount of $3,000 upon its third affirmative answer and defense.'

When the cause was assigned for trial to the Honorable James R. Bain, one of the judges of the Circuit Court, he entered an order of reference, which recited: 'The plaintiff and the defendants, through their attorneys of record, having orally stipulated in open court that an Order of Reference be made appointing Herbert C. Hardy, of Portland, Oregon, to take all...