The Benevolent Association of Elks entered into a contract with John Thatcher Son on March 13, 1917, for the construction of what is known as the Elks' Home in this city. The contract price as finally agreed on, after making certain deductions and allowances for extras, was $290,312.65.
There was paid the contractor on account, from time to time as the work progressed, the sum of $222,628, leaving a balance due on the contract, when the building was completed and accepted, of $67,684.65.
Before the building was completed and accepted, the contractor defaulted in his payments for labor and material and with his subcontractors, and numerous liens were recorded against the owner. Numerous garnishments were also served on the owner.
The plaintiff herein, a furnisher of material, instituted this proceeding, by which the owner, the contractor, the surety on the contractor's bond, the subcontractors, and some 38 materialmen and laborers who had recorded their claims were cited in order that their respective rights might be determined and adjusted.
The Elks Association deposited the balance due the contractor in the registry of the court, and prayed to be released from any further liability under its contract with Thatcher Son.
It also prayed that all liens recorded against its property be canceled.
Answers or interventions were also filed on behalf of the contractor, subcontractors, and the various laborers and furnishers of material who had recorded their claims.
The case was referred to a special commissioner to take the testimony and to report the result of his findings to the court.
As the taking of testimony before the commissioner progressed, many of the claims were admitted by the contractor, and were *Page 599 paid, under order of court, out of the fund on deposit.
Having completed the taking of testimony on the disputed claims, the commissioner made his final report and conclusions to the court, which in due course was approved, except as to certain matters which were opposed by the contractor and by Bond Bro., subcontractors.
On a hearing of these oppositions, the court rejected all of the contentions of the contractor and approved the final report of the commissioner, except as to two items, amounting to $1,196.80, claimed by Bond Bro. against the contractor, which two items were disallowed by the commissioner.
From this judgment, Thatcher Son only have appealed.
The real contest on this appeal is between the contractor and subcontractor, and between the contractor and the Elks Association.
One of the claims against the Elks is that of interest at the rate of 5 per cent. per annum from August 31, 1919, to September 11, 1920. This claim is made on the theory that the building was completed and accepted at the earlier date mentioned and that the balance of the price was then due, and hence the Elks Association owes interest up to the time of the deposit.
The contract provided that the final payment of 15 per cent. should be made 30 days after the entire work shall have been completed and accepted by the owner. It was stipulated, however, that the contractor should furnish the owner with a certificate, signed and sealed by the recorder of mortgages, to the effect that the owner has filed and registered, in the office of the recorder of mortgages, a notice of its acceptance of the said work and the terms of the contract, and that 45 days shall have elapsed since the recordation of said notice of acceptance. And, further, that no liens or privileges have been filed for *Page 600 record with the recorder of mortgages against the said property or against the contractor, growing out of, or on account of, the execution of the contract; and that the contractor has had canceled and erased all inscriptions created by, or resulting from, the recordation of the contract.
The certificate thus required of the contractor before he could claim the last payment was never furnished the owner. Indeed, it could not be procured from the recorder of mortgages, for the reason that, before the building was completed, there were claims recorded against the property, and garnishments served on the owner for an amount largely in excess of the balance due on the contract. This balance was not due, and payment could not have been demanded by the contractor, prior to the time said balance was deposited in the court. It is clear, therefore, that, under the plain provisions of the contract, the owner was not compelled to pay said balance, could not have done so, except at its risk, and therefore owes no interest.
Another complaint made by the contractor is that the commissioner and the court erred in allowing interest to some 28 claimants from certain dates specified in the commissioner's report, whereas interest should only have been allowed from judicial demand, because of the fact that the proof fails to show the due dates of said accounts. The record declares, however, that four of the parties named were allowed interest only from judicial demand, as that was the prayer of the petition. As to all of the other parties, the respective petitions alleged the maturity of the claims, and prayed for interest from the respective dates fixed by the commissioner.
These petitions were sworn to, and, in the absence of any showing that the claims were not due at the time alleged, we must assume that the commissioner acted on sufficient evidence. *Page 601
A further complaint is that the commissioner and the court erred in allowing interest to John T. Pender, Albert Weiblen Marble Works, and H.W. Bond Bro. from the dates set forth, for the reason that the contract with these parties contained a provision that final payment should be made only 30 days after the architects shall have certified to the Elks that said contract was completed, and that said certificate was not given until August 1, 1919.
In the petition of Albert Weiblen Marble Works, it is alleged that petitioner completed the work called for by its contract on July 31, 1919, and prayed for interest from that date. In answer to that petition, Thatcher Son admitted that fact, but denied that any interest was due until 30 days after the completion of the building.
We have been unable to find in the record any contract containing such a stipulation.
John T. Pender, in his petition, claimed $2,268.75, with interest from April 5, 1919, $632.72, with interest from October 31, 1918; and $98.10, with interest from April 11, 1919.
Thatcher Son did not deny this, nor do we find any contract which postponed the maturity of the claim until thirty days after the completion of the building.
The report of the commissioner and the judgment of the court only allowed Bond Bro. interest from judicial demand, which was February 12, 1920. See Commissioner's Supplemental Report, vol. 1, p. 215, and judgment of court, vol. 1, p. 246.
The complaint as to interest is therefore not well founded.
It appears that one John Swiler had contracted with Thatcher Son to do the masonry and brick work, for which he was to receive the sum of $29,457. The contract was entered into some time in March, 1917. Swiler proceeded with his work up to some time in December of that year, when he threw up his contract. He alleged in his petition *Page 602 in this proceeding that Thatcher Son defaulted in the payments, and failed to furnish the necessary material. He claimed $1,632.99 as the balance due him when he quit the work, and $4,000 as profits he would have made had he been permitted to complete his contract.
Thatcher Son, on the other hand, alleged that Swiler violated his contract without just cause, and notified the contractor that he would not complete the work.
Wherefore Thatcher Son had to complete the masonry and brick work at an allocated cost of $44,125, and that Swiler owed them this amount, together with 10 per cent. supervision cost, and 10 per cent. as a reasonable profit, less $2,090.51 paid Swiler for the work he had done.
Thatcher Son therefore claimed from Swiler, for completing the contract, $26,120.88 in excess of the price that Swiler had agreed to do the work for.
The commissioner found that Swiler had abandoned the work, and had been paid in full for what work he had performed. He also found that Thatcher Son were not in fault, but concluded that there was no evidence in the record to support the claim for damages against Swiler.
Counsel for Thatcher Son rely on the testimony of Wogan, the architect, and of Mossie, the representative of the contractor.
We have examined this testimony very carefully, and are constrained to agree with the conclusion of the commissioner, which comes here with the sanction of the trial judge.
Wogan, the architect, did not know anything about what had been paid Swiler for the work performed by him, and did not know what work was performed by Thatcher Son after taking over the contract.
The most to be obtained from his testimony is that he was furnished a schedule by the contractor after the whole brick work and *Page 603 tile partitions had been completed, and he approved the same, allowing $27,500 for brick and $5,500 for hollow tile, or a total of $33,000.
This amount, as we understand, was an estimate, intended to cover the whole work of the Swiler contract, from the beginning of the work until its completion by the original contractor.
What proportion of that work was done by Swiler, and what proportion was performed by Thatcher Son, Wogan did not undertake to say. Nor would he say what amount had been paid Swiler, and what amount had been retained by the contractor.
Nor are we impressed with the claimed probative weight of the testimony of Mossie. He was a salaried employee of Thatcher Son, and claims to have had the supervision of the work left undone by Swiler. There was prepared, under his direction, a statement showing that something over $16,000 had been paid to laborers.
There are also some 300 separate invoices, aggregating something over $27,000, which, it is claimed, represent material purchased for the completion of the Swiler contract.
There is nothing on the face of these invoices and nothing in the pay rolls to indicate that the labor was performed, or that the material used on the Swiler contract.
The only proof in support of these statements is that of Mossie, who claims that he purchased all of this material, and personally paid all of the laborers.
The commissioner and the trial judge, who had this witness before them, evidently were not impressed with his evidence, otherwise they would have given a judgment for some amount against Swiler. We are persuaded that they judged him rightfully.
The more serious controversy is that between the contractor and the subcontractor Bond Bro.
The contract of Bond Bro. required them to do all of the furring, lathing, plastering *Page 604 (both plain and ornamental), cementing, cast cement work, and Caen stonework. There is no dispute, and it seems to be conceded that whatever work of that kind and character was required to be done by Thatcher Son, under their contract with the Elks, the subcontractor was obliged to do; and that the said subcontractor was bound by the stipulations of the original contract with regard to the supervision and decision of the architect.
The original subcontract price for the plastering, etc., was $18,785, but this amount was augmented during the course of the execution of the contract on account of extra work. All of the claims for this extra work were admitted by the contractor, either in their answer or on the hearing before the commissioner, except the four items which form the subject of controversy on this appeal.
Before considering the four items referred to, it may be well to dispose of a claim made by the contractor against Bond Bro. for $3,740.81.
After the work of cementing or plastering the parapet walls and penthouse by the subcontractor, the architect condemned it, and ordered it taken off, and replastered.
The subcontractor declined, and the contractor was forced to do the work. The amount above stated is claimed to have been expended for the work.
A large part of the testimony was taken on this issue, and, of course, is quite conflicting.
Under our appreciation of the evidence, we are of the opinion that the architects were justified in condemning the work, and that their action was not arbitrary.
We agree with the commissioner and the trial judge that the defective work was not due primarily to the fault of the subcontractor.
In this connection the commissioner says:
"Regarding the complaint against the thickness of the cement on the penthouse, it is to *Page 605 be observed that the tile walls of the penthouse were put up by another contractor, whose work did not conform to the requirements of the specifications that the walls should be smooth and plumb. If the coat of cement the interveners applied was too thin in spots, it does not appear but that the fault was of the tile contractor and of his walls rather than that of interveners."
"As to the parapet wall, the photographs filed in evidence convince me that the cracks which developed were due to bad masonry put up by another subcontractor and not to bad cement work."
This claim was therefore properly rejected, both as against Bond Bro. and the Elks Association.
Furnishing and Erecting Hangers. — A hanger is said to be an iron rod approximately the size of a pencil — about from one-fourth to three-eighths of an inch in diameter, and from two to six feet long. The hangers are put through the concrete floor, tied to reenforcement rods, and carry runners that the wire lathing is tied to, so that the plaster is put on, making a suspended ceiling.
It is conceded that the putting in of these hangers was required of the contractor in his contract with the Elks; but the subcontractor claims that the work was not embraced in their contract, and ask $457 for the work as extra.
The argument advanced by the subcontractor is that it was the custom for the contractor to put the hangers in, and that it was easier for him to put the rods through the concrete floors when the concrete was poured. The argument might suffice if the putting in of the rods was not required by the original contract. But the contract so required, and this requirement ran with the subcontract. The architect so ruled, and the commissioner so decided. We think that ruling correct.
Plastering Behind Baseboards and Wainscoting. — The commissioner and the court below allowed the subcontractor $89.40 for plastering behind the baseboards, and $539.32 for plastering behind the wainscoting. The *Page 606 theory upon which the claim was allowed is that the plans and specifications did not specifically require the plastering to be done behind the wainscoting and the baseboards, and, in the absence of such specific requirement, the custom controls, which custom is that no such plastering is done, unless required by the contract.
This claim was therefore allowed the subcontractor as an extra, but was held not to be an extra as between the contractor and the owner.
When the controversy arose over this work between the contractor and the subcontractor, the matter was submitted to the supervising architect, and he decided that the work was called for by the plans and specifications, and hence within the terms of the contract and subcontract.
The work was done by Bond Bro. under protest.
There were quite a number of experienced plasterers, including Bond, who testified that for more than 20 years it had been the custom to only plaster down to the line of the base or the wainscoting, unless the plans and specifications indicated that the walls should be plastered to the floor.
It seems to be conceded that the plans do not indicate either that the plastering should go to the floor or that it should stop at the top of the wainscoting or the base, except in the case of the lodge room, where the details called for the plastering behind the wainscoting.
The specifications require that all interior walls and partitions should be plastered, and do not limit the plastering to the line of the wainscoting, and the architect, Wogan, testified that his plans clearly showed that the walls should be plastered behind the base and wainscoting. It was shown also that the subcontractor plastered one room behind the wainscoting, and made no extra charge therefor. *Page 607
If what the architect says is to be accepted, then the specifications did call for the plastering of all walls with limitation, and the parties are to be governed accordingly.
"Where the intent of the parties is evident and lawful, neither equity nor usage can be resorted to, in order to enlarge or restrain that intent." C.C. 1963.
The contract between the Elks and Thatcher Son provided that:
"Should any dispute arise respecting the true construction or meaning of the drawings or specifications, the same shall be decided by Messrs. Toledano, Wogan Bernard, architects, and their decision shall be final and conclusive."
A dispute did arise as to whether this work was called for by the contract.
An appeal was made to the architect, and his decision was that the said work was not to be classed as extra, but came under the contract. There is no contention that the architect acted in bad faith or from improper motives, and there is nothing which would justify the court in holding that his decision was arbitrary.
An architect is a person skilled in the art of building, is the recognized head of the building trade, and is supposed to be skilled in the art of planning and designing structures of every description. 2 Am. Eng. Ency. of Law, p. 815.
Where, therefore, the parties have agreed to abide by the decision of an architect, the courts will hesitate, in the interpretation of the contract, to set aside the architect's ruling, unless manifestly arbitrary, or is shown to have been rendered in bad faith.
In 6 Ruling Case Law, p. 957, it is stated that:
"In construction contracts the parties frequently insert stipulations to the effect that the completion, sufficiency, classification or amount of the work done by the contractor shall be determined by the architect. * * *
"By such stipulation the parties constitute the architect * * * an arbitrator, and the provision is held, if anything, more binding than *Page 608 an ordinary submission, for the reason that it enters into and becomes a part of the consideration of the contract, without which it would not in all probability have been made."
The same rule is laid down in 9 Corpus Juris, p. 772.
In O'Donnell v. Henry Forrest Co., 44 La. Ann. 845, 11 So. 245, the court said:
"The plaintiff and the defendants having agreed, in case of disputes or differences as to the construction of their contract, or the sufficiency of the performance of any of the work to be done under it, or the price to be paid, to submit them to the civil engineer in charge, who was to consider and finally decide them, are bound by the measurements made, and by the decision of the selected arbiter."
In the case of Dugue v. Levy, 114 La. 31, 37 So. 999, the court found that the plaintiff had in some way incurred the displeasure of the supervising architect, and that the latter was disposed to be overexacting with him, and said:
"A strong case must be made out, to induce the courts to overrule the decisions of the supervising architect, but this case is of that character."
In the case of Shea v. Water Board, 124 La. 333, 50 So. 177, in construing a contract which provided that the general superintendent of the defendant board shall finally decide all matters of dispute involving the character of the work, its quantity, and the compensation therefor, the court said that:
"The authorities hereinabove quoted show that such a clause as this in a contract is binding, and that a decision under it is conclusive, in the absence of a showing that it was made in fraud or bad faith; and the plaintiff has not made such a showing."
This holding seems to be in line with the federal jurisprudence.
In the case of Plumley v. United States, 226 U.S. 545, 33 S. Ct. 139, 57 L. Ed. 342, the Supreme Court of the United States held:
"One contracting to complete an unfinished public work in accordance with the original contract and duly authorized changes is not entitled to compensation for extra work, where *Page 609 the Secretary of the Interior has decided against his claim, conformably to a provision in his contract that if there be any discrepancy between plans and specifications, or between his contract and the original contract, the matter shall be referred to such Secretary, whose decision shall be conclusive."
See, also, Chicago, Santa Fé Calif. R. v. Price,138 U.S. 185, 11 S. Ct. 290, 34 L. Ed. 917.
Plastering Ceiling Beams and Column Heads in Tankroom. — In the contract, it was required that Thatcher Son should demolish an old building which stood on the premises where the new one was to be erected. The specifications required that all of this building should be demolished, except the walls around the tankroom. In tearing down the building, the walls that were to remain were exposed to the elements, and the old plastering thereon was badly damaged. The subcontractor was required to replace the plastering on the walls, and claims the same as extra, the amount being $556.40. The commissioner allowed this claim on the theory that it was not covered by the subcontractor's contract. We are unable to agree in this conclusion. Thatcher Son were bound to replace this old plastering, and the subcontractor assumed the same obligation. It is very appropriately suggested that the Elks contemplated a new building, and the specifications clearly contemplated that the plaster would be removed or damaged in tearing down the building. Besides, the matter was left to the architect, who ruled that the work should be done, and we have seen that his ruling is binding.
Plastering of Tile Partitions in Basement. — This claim amounts to $721.80, and was rejected by the commissioner as not being an extra.
The only basis for the contention that this item was an extra is that the specifications provided that the partitions should be waterproofed. *Page 610
But the specifications also required that the brick walls and tile partitions should be plastered.
The tile partitions were not waterproofed, and the architect ruled that they should be plastered.
The commissioner said that because, in another place, the specifications provided that these partitions should be waterproof, did not relieve the subcontractor from the obligation to plaster them.
What we have said as to the binding effect of the decision of the architect is equally as applicable to the last two, as it is to the first two, items claimed by the subcontractor.
It is therefore ordered and decreed that the judgment of the court below, in so far as it allows Bond Bro. $475 for furnishing and erecting hangers, and in so far as it allows Bond Bro. $721.80 for plastering tile partitions, and in so far as said judgment approved the report of the commissioner, which allowed Bond Bro. $556.40 for replastering ceiling beams and erecting caps and $592.05 for plastering behind base and wainscoting, be, and the same are, reversed and set aside. All four of said claims are rejected and disallowed. In all other respects, the judgment appealed from is affirmed, the appellant, and appellee Bond Bro. to pay the cost of this appeal.
On Rehearing.