Iron Clad Manufacturing Co. v. Stanfield

Counsel

S.S. Field, for the appellant. The question in the first exception was objectionable on two grounds: (1) Because it is leading; and (2) because it asked a witness, and that witness the plaintiff, to answer the precise question that the jury were to decide. (1) The question palpably called for the answer yes (the answer was: "Yes, sir; it was"), and thus the question fits exactly the definition of leading questions, "which suggest to the witness the answer desired, or which embodying a material fact, admit of a direct answer by a simple yes or no, or which instruct a witness how to answer on material points." 2 Poe Pl. and Pr., sec. 261; Lee v. Tinges, 7 Md. 234 ; 1 Greenleaf Ev., sec. 434. (2) The identical question which the jury were sitting to decide was whether "this building was put up in accordance with the written specifications and plans and the contract." The proper evidence was: ( a ) The contract, including of course, the plans and specifications; and ( b ) the facts as to what work and what kind of work the plaintiff did; and from such evidence it was the jury's function to say whether or not the building was put up in accordance with the contract; and permitting the plaintiff, as a witness to answer that precise question was a manifest invasion of the province of the jury. Balto. Belt R.R . v. Sattler, 100 Md. 306 ; Consolidated Gas Co . v. Smith, 109 Md. 198 . The plaintiffs' first prayer was misleading, because it was calculated to create the impression upon the minds of the jury that a substantial compliance with the contract by the plaintiffs would entitle the plaintiffs to the full contract price; which is not the law. In order to entitle the plaintiff to sue upon the contract and claim the full contract price, he must show a full compliance on his part, though if he shows a substantial compliance, and the building is accepted by the defendants, he is entitled to recover under the common counts, the contract price less a reasonable deduction for defects or variations from the contract. 30 Enc. of Law, 2d ed. 1221; Presbyterian Church v. Hoopes, 66 Md. 598 ; Pope v. King, 108 Md. 46 . Said prayer is also objectionable, because it does not in itself or by reference to any other prayer give the jury any guide as to the amount of the damages. W.M.R.R . v. Martin, 110 Md. 563 . The second prayer is misleading because of the direction to the jury to allow the balance of the contract price less deductions for defects in the work caused by "lack of workmanship on the part of the plaintiffs or by the use of material other and inferior to those specified in the contract." The defendants were entitled to deductions for any defects or deficiencies in the completed building from what the contract called for, no matter how caused. The plaintiffs themselves didn't do any of the work on the building, and a great deal of it was not even done under their direction, but was let out by sub-contracts, and therefore to confine the attention of the jury to defects caused by the "lack of workmanship" on the part of the plaintiffs, seems to us, misleading. Again, the phrase "lack of workmanship" refers to the plaintiffs' capacity or skill; whereas, the true issue in every case, and in this case, is not whether the men who did the work were skilful mechanics, but whether they properly used that skill in performing this particular contract. In other words, the issue in such a case is not deficiency or unskilfulness in the workmanship, but defect in the work; and, as everybody knows, a skilful workman sometimes does bad work, the prayer ought to have confined the attention of the jury to the character of the work and not to the workmanship of the parties who did it, and specially ought not to have confined them to the lack of workmanship on the part of the plaintiffs, who themselves, did none of the work. Again, the prayer allows deductions for any deviation from the plans and specifications not acquiesced in by the defendants, and shown to have made said building less valuable to defendants. We submit that that phrase was also misleading. Defendants might acquiesce in a very substantial deviation from the contract in the sense of accepting and using said building; they would thereby make themselves liable on a quantum meruit, but they would not be liable for the whole contract price, if there were defects and deviations from the contract. Again, we submit that the phrase "shown to have made said building less valuable to the defendants," is not the true theory of deduction for defects. For example, it may be that a factory building of this kind would be just as valuable with a dry sand floor that would cost perhaps $500 as with a concrete floor which was to cost $2,800; and yet, nobody would say that if the plaintiffs had simply put in a sand floor and the defendants had accepted and used the building that they would be obliged to pay the $2,800 that they had promised to pay for the concrete floor. The plaintiffs' third prayer was bad, because there was no evidence to sustain the statement therein "that the construction of said platform was postponed by request of the defendants and was afterward erected promptly upon request;" which objection is embodied in defendants' special exception. The plaintiffs' fourth prayer was misleading and bad, because it told the jury that there should be no deduction from the balance of the contract price for any deviation from the contract made by direction of the defendant or their duly authorized agent. This expression, agent, referred to Mr. Conn (because there was no pretense of any evidence that deviations were made by direction of any other agent), and Mr. Conn had no such authority. The defendants' first prayer should have been granted. (1) It contained a clear and distinct statement to the jury of what the contract required the plaintiffs to do, which is not contained in any other prayer. The defendants were entitled to have the Court instruct the jury as to the meaning of the contract and the rights and liabilities of the parties thereunder. 11 Enc. of Pl. and Pr., pages 78-80; Osceola Tribe v. Rost, 15 Md. 295 . Again, it laid down the true measure of damages, namely, that the jury should deduct for defects if so found, from the balance of the contract price, the reasonable cost of putting the building contracted for in the condition it would have been if the plaintiffs had built it according to contract. The Court refused this prayer, and by the other prayers instructed the jury that the deduction which they may make for defects would be the difference in the value of the building as constructed, and its value if it had been constructed according to contract. (1) The Court had ruled early in the case that the plaintiffs could not prove the value of the completed building, under a theory of quantum meruit, upon the ground, as defendants' counsel understood it, that there being a written contract in this case specifying the price of the work, if done according to contract, the measure of recovery must be that contract price, less allowances for defects or variations and that the measure of recovery could not be shown by showing the value of the work as done. The defendants, therefore, proceeded upon what they understood to be the Court's ruling, to prove the defects and what it would cost to make the building conform to the contract, and particularly with regard to the concrete floor. They proved by two witnesses that the floor was defective, and that the only way to remedy it would have been a new topping, and that would have cost about $1,400. And the defendants did not put in any evidence, nor was there any in the record as to the difference in the value of the great big factory building with a good concrete floor, such as the contract called for, and a factory building with a concrete floor cracked and soft, such as the plaintiffs put in; the jury might have been satisfied that the floor was imperfect; they may have been satisfied that it would cost $1,400 to make it conform to the contract, and they might have been willing to have given the defendants that deduction for that item alone; yet, the modification of the fifth prayer by the Court emphatically told them that they could not act upon that evidence, and, as above stated, there was no evidence which would guide them to arrive at any particular sum under the prayer as modified by the Court. Even if the principle of deduction which the Court inserted in the prayer were the correct one, it was not correct in this case because defendants had been led by their understanding of the Court's rulings during the plaintiffs' case, to put in their evidence upon one theory, and to omit to put in any evidence upon the other theory to which the Court's instructions at the end of the case confined the jury. The principle for the allowance for defects, which the Court instructed the jury should govern, is not the correct principle, but the correct principle is that laid down in the defendants' first prayer which was refused, and in the defendants' fifth prayer as presented, namely, to deduct from the contract price the amount that it would have reasonably cost to have made the building conform to the contract. In 30 Enc. of Law, 2d ed. 1222, the rule is thus stated: "As a general rule, the amount to be allowed to the builder in case of a substantial performance is the necessary cost of remedying the defects or omissions in performance; but when the cost of remedying the omission would be very large as compared with the benefit which would be derived therefrom by the builder, he has been allowed as a deduction only the difference in the value of the work as done, and its value if it had been done in strict compliance with the contract." (In this "builder" means owner.) The learned judge below rejected what the Encyclopedia states is the rule, and adopted what is stated to be the exception. In Huysler v. Owen, 61 Mo. 274-5, the Court says: "When the building has been completed, but differs in plan of construction or in material employed from that which the builder contracted to erect, and this is the only element of damage, and there has been no waiver, the true rule for estimating the damages sustained by the owner, whether the action be for the contract price or for the value of the labor and material, is to ascertain what it will cost to make the building conform to what the builder contracted it should be." The rule as laid down in the Encyclopaedia and in Huysler v. Owen, has been approved and applied in Central Trust Co . v. Arctic Ice Mach. Co., 77 Md. 238 ; Filston Farm v. Henderson, 106 Md. 379 ; United Surety Co . v. Summers, 110 Md. 99 (see pltffs' 1st prayer, 99-100, approved 123); Keeler v. Herr, 157 Ill. 59 -60; Butler v. Co., 130 U.S. 526 -7; Beha v. Ottenberg, 6 Mack. (D.C.) 348; Flaherty v. Miner, 123 N.Y. 388 ; Aetna Iron and S. Works v. Kossuth Co., 79 Iowa 45 -6; Sheppard v. Mills, 70 Ill. App. 75 ; Stickler v. Overspeck, 127 Pa. St. 446, 450 (approved in 146 Pa. St. 502); Cook v. Co., 93 Ill. App. 301 . W. Calvin Chesnut and J. Morfit Mullen, for the appellees. The plaintiffs' second prayer is based upon the correct rule of damages, which is as follows: When a building is put up under a contract in substantial compliance with the contract, but varying in some unessential particulars, and when it has been accepted by the owner, if the builder or contractor has unintentionally or inadvertently failed in some particulars to perform the contract — but has acted in good faith — he is entitled to recover the full contract price less such sum as should be deducted therefrom to compensate the owner for the loss in value of the building actually constructed as compared with the value of the building contracted for. There is no question in this case as to the good faith of the plaintiffs. The defendants admit this. The appellants contend that in the case at bar the proper rule is not as just outlined, and they say that they should be allowed to deduct from the contract price such a sum as will pay for altering the building as actually constructed to make it conform in every detail to the precise specifications of the building contracted for. It is clear that there are many cases where these two rules could be used interchangeably, because under many states of facts no difference in consequences flow from applying either one or both. As an instance, take the case of where A. agrees to build B. a house for $10,000, and it is specified that of this $10,000, $500 should be spent in papering the interior. If A. completes the house except for the papering, which he omits entirely to do, it is immaterial to either A. or B. whether you say the measure of damages is $10,000 less $500 — i.e., the difference between the value of the house contracted for and the one actually built — or that A. can recover the contract price, $10,000, less what it would cost to make it conform to the contract — because neither A. nor B. has incurred the $500 expense. But if you take the situation where B. has spent $500 in papering, as the contract required he should, but he has inadvertently failed to comply precisely with some unimportant details of the papering specifications, it is not sound justice to permit B. to deduct the full $500. And this is what the appellants contend for. The plaintiffs' 2nd prayer and defendant's 2nd prayer state the same proposition of law; there was therefore no error in granting the plaintiffs' second prayer. The defendants' first and fifth prayers (the latter before the modification) either stated a rule of law inconsistent with or the same as defendants' second prayer. In either event there was no error in rejecting the defendants' first prayer, and in modifying the fifth prayer. The principles controlling such a situation are settled in the Maryland practice by the following authorities: Pa. Ry. Co . v. Cecil, 111 Md. 288 ; Spencer v. Trafford, 42 Md. 1 -21; Young v. Mertens, 27 Md. 114 ; Harford County v. Wise, 71 Md. 43 . Even if this Court, after reviewing the reasons assigned should think that, in this case the appellants can still question the propriety of setting out the rule of damages as outlined by the trial Court, it will be apparent from a review of all the authorities dealing with the question that the lower Court has correctly stated the law. 2 Sedgwick on Damages, secs. 616 and 617; Small v. Lee, 61 S.E. 831; 4 Ga. App. 395 ; Norcross Bros . v. Vose, 85 N.E. 468 (Mass.); Gleason v. Smith, 9 Cushing (Mass.) 484; Madisonville v. Rosser Castoe, 8 Ohio C.C. 387; Pinches v. Swedish Lutheran Church, 55 Conn. 186 ; Manning v. School District No. 4, 124 Wis. 84 . These authorities unequivocally maintain the proposition, that where a building has been substantially constructed in accordance with the contract requirements, but varies in some unessential particulars, and it has been accepted by the owner, the measure of damages, if the contractor has acted in good faith, is the full contract price less such sum as should be deducted to indemnify the owner for the deviations from the plans and specifications. They discuss the difference between this rule, and the rule contended for by the appellants, that the measure of damages is the cost of making the building actually constructed, correspond precisely with all the details of the plans and specifications. The principle involved in all of these authorities is, that, in those cases where it would be unjust to apply the rule contended for by the appellants, a Court of law will not work a hardship upon one who has contracted to build a house or other structure, merely because he does not comply in detail with all contract requirements, if he has acted in good faith. The proper measure of damages is the difference between the value of the building as contracted for, and as actually constructed, without reference to what it would cost to make it correspond to the precise requirements of the plans and specifications. It is pointed out in Sedgwick on Damages, supra, that there is a distinction between the measure of damages, and the manner in which the amount of damages is proved. The measure of damages means the rule of law applicable to a certain state of facts, laid down as a standard to guide the jury in determining the amount of recoupment, if any. The manner of proving the damages is, of course, quite different from the measure of the damages; the former refers only to the character of the evidence that is to be adduced in order to show the facts of each particular case. The rule of law ( i.e . the measure of damages) is the same in all cases, but the nature of the proof to be adduced varies with the facts of each particular case. There are many cases (for instance — where a part of the building, which can be easily supplied, such as a cement floor — has been entirely omitted) where it would be proper to give evidence of what it would cost to complete the building in the omitted particular. In such a case allowing the measure of damages to be dependent upon the cost of completing the building, works no hardship upon anybody. Some of the authorities, therefore, state both of the two rules, the one as we contend for, and the other as the appellants contend for (see Brantly on Contracts, pages 218-219). And in some of the authorities, the rule is stated as we contend for, without referring to the propriety of allowing evidence to show what it would cost to complete the building, to make it as contracted for. Cullen v. Sears, 112 Mass. 299 ; Kane v. Stone Co., 39 Ohio State, 1; Woodward v. McGuire, 3 Murphrey (N.C.) 501. Other cases state the measure of damages is what it would cost to make the building correspond precisely with the plans and specifications of the contract. We have found no case maintaining the proposition that where it would work a hardship upon the contractor to make the building comply with the precise requirements of the contract, if he has varied in some unessential details, and did so in good faith, the proper measure of damages is to be considered with reference to the cost of making the building as constructed correspond to the precise contract requirements. All the authorities are unanimous in holding that, where it would work a hardship upon the contractor who has acted in good faith, to make the building correspond precisely with the contract requirements, if it has been accepted by the owner and varies in unessential particulars, the proper rule of damages is to allow the owner to deduct merely the difference in value between the building contracted for, and the one actually constructed. The case of Small v. Lee, 61 S.E. 831, 4 Ga. App. 495 , involved the very question presented in the case at bar. The principle was fully discussed and the Court decided in favor of our contention. Say the Court in the course of the opinion: "Where the defects in the house as constructed may be remedied at a reasonable expense, it would be proper, we think, to deduct from the contract price the sum which it would cost to complete it according to the requirements of the plans and specifications. Blakeslee v. Holt, 42 Conn. 226 . If the contractor has built a structure substantially adapted to the purposes for which it was built and of which the owner is in the use and enjoyment, but the defects of the structure cannot be made to conform strictly to the requirements of the contract, except by an expenditure which would deprive the contractor of adequate compensation for his labor and materials, justice and equity would require the adoption of another measure of damages. "In this case the contractor did not wilfully deviate from the plans and specifications, but built a house according to his construction of the measurements and rooms required. The house was in every respect a compliance with the contract, except that it failed to make the rooms and veranda of such dimensions as the owner of the house wanted, and what she insisted she was to receive. She accepted the house and occupies it as her residence, and has thus received from the contractor a substantial benefit from his labor and materials. We do not mean to say that she has, by accepting the house, waived her right to any damage which she has incurred by reason of the contractor's failure to comply with the plans and specifications in reference to the dimensions of the rooms; for, notwithstanding the fact that she received the house and is occupying it, she is still entitled to be in the same condition financially as she would have been had the contract been fully performed by the contractor. She has a right to a house as good as that which the contractor agreed to furnish, but the assertion of her right should be in such a manner as not to deprive the contractor of a fair and just compensation for his labor and materials. Under the facts of this case, we think that the true measure of damages, and one which would not be unjust in its application to either party, would be the difference between the value of the house as finished and the house as it ought to have been finished. To require that the house should be rebuilt, and that the contractor should pay the cost of rebuilding; or that the estimated cost of making the house conform to the contract should be allowed as damages, would be to give an unconscionable advantage to the owner; and would deprive the contractor of adequate compensation for his work and materials." See also Gleason v. Smith, 9 Cushing. In Norcross Bros v. Vose, 85 N.E. (Mass.) 468, the question before the Court was as to the proper rule of damages for failure to construct a cement floor and to put on the topping properly. The Court held in substance that the general rule of damages was to deduct from the contract price of the floor the lessened value of the floors as they were actually constructed (just as we contend for). If the only feasible way to make the floors serviceable was to resurface them (and this is not our case because defendants in the case at bar used the floors for three years), then the jury could allow as damages the cost of resurfacing, but if resurfacing was inexpedient, the jury must reject the consideration of this cost. As far as we know, there are no cases decided in Maryland that deal with the precise proposition now being discussed; but our situation is like the case of an article contracted to be sold with a warranty of soundness or fitness, when the article sold does not comply with the warranty. It is well-settled in Maryland, in cases of this kind, that when the article sold has been accepted, the measure of damages is the difference between the value of the thing warranted, with the defects warranted against, and the value it would have had without such defects — that is, the defendant is allowed to recoup the difference between the value of the thing contracted for and the thing actually supplied — just as we contend for. Horn v. Buck, 48 Md. 358 , 372; Lane v. Lantz, 27 Md. 216 . The kernel in the nutshell of all the law dealing with this point is that the rule we contend for is a rule of law; the question as to the cost of making a building conform to precise contract requirements, is always one of evidence merely. Whether or not such evidence can be considered in a particular case depends upon its own facts. The test to be applied in each case is: Does, under all the facts of the case, it work a hardship upon the contractor? That it would work a hardship and a great injustice upon the plaintiffs to allow the defendants the rule they contend for in the case at bar, appears from the following reasons: First. The defendants in this case have sold the building, which is the subject-matter of this suit, and have suffered no real loss in so doing. The defendants therefore, would be in no better position, if they were allowed to recoup the actual cost of putting in a new top to the cement floor. It makes no difference to them whether or not the building now complies with precise contract requirements, provided they are allowed an opportunity to recoup any financial loss that they may claim to have suffered. Such an opportunity was given them before the jury. Second. The measure of damages proposed by the appellants is not based upon an outlay that they have actually made, and the Court has not before it a case where in order to make the building correspond to contract requirements, the defendants have suffered actual loss in spending money to have the building measure up to what they specifically contracted for. If these defendants had actually spent $1,500 or $1,700 to make the cement floor comply in each precise detail with the one referred to in the contract, and had been compelled to do so to have a serviceable floor, this Court would have an entirely different case before it, but the fact is that a cement floor was built in substantial compliance with the contract requirements, and that the defendants had the use of it and that, from all that we know to the contrary, it answered all of their needs during the whole of the period in which they owned and used the building contracted for. Third. The contention of the appellants ignores the fact that a cement floor was built which apparently satisfied the needs of the appellants during the time that they used the building, and that no credit is given the appellees for the cement floor as actually constructed, including both the base and the topping, both of which were used during the whole period of the ownership and use of this building by the appellants. Fourth. The testimony in the record by the witnesses for the appellants as to what it would cost to make the cement floor correspond with the precise contract requirements is all arrived at by estimates made almost four years after the completion of the contract, and it is submitted that this estimate of the defendants, tending to show the cost of making the floor conform to contract requirements, is purely speculative.