Stewart v. American Bridge Co. , 108 Md. 200 ( 1908 )

This is the defendants' appeal from a judgment entered against them in the Superior Court of Baltimore City. The declaration contained the common counts only to which the defendants pleaded the general issue pleas, upon which issue was joined. Subsequently, the defendants filed the following additional plea, viz:

That at the time the plaintiff's action was commenced the plaintiff was indebted to them in a large sum of money, growing out of the furnishing of material and work and labor with reference to the erection of the warehouse known as Numbers 28-30-32 Hopkins Place, in the city of Baltimore, towit:

The sum of $     13.78 for failure to paint wall boxes;
The sum of       50.80 for sundry cutting and patching of walls
made requisite by the plaintiff failing
to construct its beams and other structural
iron work to conform to the
plans and specifications;
The sum of        5.95 for making, at the request of the plaintiff,
certain templates;
The sum of      687.70 paid to the Chesapeake Iron Works for
flitch plates, which the plaintiff had
agreed to furnish, and, nevertheless,
failed so to do;
The sum of      445.00 for setting steel beams, taking down
and resetting the same, including the
necessary cutting out and rebuilding
in connection with the location of the

channels and beams for the stair landings;
The sum of        7.60 paid Deitrich Bros. for clean-out
doors, which the plaintiff should have,
but did not furnish;
_________
$1,210.83
Forwarded,   $1,210.83
The sum of    1,375.00 being the amount of liquidated damages
paid by the defendants to the
owners of the building by reason of
their failure to complete the same as
by the contract provided, the entire
delay in so completing said building
having been occasioned by the negligence,
default and wilful acts of omission
and commission of the plaintiff;
The sum of      362.55 temporary canvas covering and other
protection to the Hopkins Place elevation,
caused by the failure of the
plaintiff to have fronts installed as required;
The sum of      225.00 cost of putting in temporary stair platforms,
on account of the plaintiff's
failure to have permanent platforms
delivered on time;
The sum of    8,000.00 being the additional cost incurred by
the defendants in erecting said building,
by reason of the manner of construction
made requisite and the delay
occasioned by the failure of the plaintiff
to furnish the material when and
as required by the defendants and in
accord with the understanding and
agreement had with the plaintiff; which
said sums amounting in all to

___________ $11,173.38, exceeded the damages sustained by the said plaintiff by reason of the non-performance by the defendants of the said several supposed promises and undertakings in the declaration herein mentioned, and out of which said sums of money so due and owing from the said plaintiff to the said defendants, the said defendants are ready and willing and hereby offer to set-off and allow to the said plaintiff, the American Bridge Company, the full amount of said damages, according to the form of the statute in such cases made and provided, and claim judgment for such balance as may be found due to the defendants from the plaintiff on said account.

Issue was joined by the defendants upon the traverse of the plaintiff to this plea, and the case proceeded to trial, which resulted, after a great mass of testimony had been taken, in a judgment for the plaintiff for twelve hundred and seventy-five dollars and eighty-two cents ($1,275.82), from which this appeal is taken. Twenty-one bills of exceptions were reserved by the defendants. Eighteen of these relate to the rulings of the Court upon questions of evidence, and the remaining three to the action of the Court upon the prayers submitted by the respective parties at the close of the whole testimony.

The exceptions to testmony may be classified and grouped under three general heads, and in this way a separate discussion of them dispensed with; first, the exception to the refusal of the Court to permit the defendants to introduce in evidence the "general conditions" contained in the contract made between the defendants and the owners of the Daniel Miller Warehouse Building which the defendants had undertaken to erect; secondly, the admission in evidence of a certain statement and voucher sent by the defendants to the plaintiff; thirdly, to the exclusion by the Court of the testimony of expert witnesses, testifying as such, to show that the unit cost of labor in handling the timber and brick construction of the Miller Building was increased beyond the normal price paid for such labor by reason of the failure of the plaintiff to deliver the material which was to be furnished by it in the prosecution of the work, with a view of thus establishing a loss or damage, which the defendants alleged they had suffered, and for which the plaintiff was sought to be held responsible under the last item of the defendants' additional plea; fourthly, the adadmission in evidence of certain original memoranda of superintendents of Wyatt Nolting, the architects; made at the time, in the course of their duty, and reported daily to their employers as the work progressed — the persons who made these memoranda being out of the jurisdiction of the Court and their handwriting being proven.

It becomes necessary, in order to ascertain the legal principles which should control the case, to understand the main and controlling facts disclosed by the record. On the 27th of May, 1904, the defendants entered into a contract with the owners of ground on Hopkins Place, in the city of Baltimore, for the erection of a large warehouse spoken of in the evidence as the Daniel Miller Building. This building was to be erected in accordance with the approved plans and specifications prepared by Wyatt Nolting, who were the architects for the owners. The plans for the building were prepared, and were approved by Mr. E.D. Preston, the Building Inspector for the city, on June 9th, 1904, and it was upon these plans that the defendants bid for the erection of the building was based, and upon which the contract was awarded. On the 28th of April, 1904, the plaintiff, being one of the largest structural steel and iron concerns in the country, had obtained from the architects a set of plans with a view of submitting a bid for furnishing and erecting the structural and architectural iron work for the Miller Building. Subsequently it did submit a proposition to the defendants for furnishing and doing this work, and on June 23rd, 1904, a contract was entered into between the plaintiff and the defendants by which the plaintiff agreed to furnish and erect complete the steel and iron work for the building.

Only such portions of this contract as relate to the issues raised by the pleadings need be noticed. The plaintiff agreed; first, to furnish and erect complete all the cast iron, steel, ornamental iron, Goetz-bog anchors, rolling steel door, and everything of a like or kindred nature called for in the specifications under the head of structural iron work, except metal frames and fire shutters; secondly, to commence at once the preparation of their material, and at all times keep themselves advised as to the progress of the work, and commence delivery and erection of the south row of columns and bases, the four rows of columns and bases on Liberty street, the lintels and pavement beams on Liberty street, within ten days from the date of the contract, and the remainder as soon as the building is ready to receive the same, carrying on a continuous delivery and erection, in such manner as the work may require, without delay thereto, and as directed by the defendants, until the completion thereof, in so far as the completion appertains to the material which was to be furnished under the contract. In the event of failure of the plaintiff to commence and continue delivery as agreed, subject to the delay of common carriers, notice of such delay to be given the defendants,the defendants were authorized to purchase such material andemploy such additional men as might be required to carry on theirwork without delay, and charge the expense thereof to theplaintiff; thirdly, that all the cast iron, steel and ornamental iron work, mentioned in the contract, should be in strict accordance with the plans and specifications prepared for the same by Wyatt Nolting, the architects, and subject to their inspection and approval and satisfactory to the defendants; any material delivered or work done failing in these requirements to be immediately removed from the premises by the plaintiff and replaced in a satisfactory manner, at their own cost and expense, without delay to the building; fourthly, that no payment made under the contract should operate as an admission on the part of the defendants that the contract, or any part thereof, had been complied with, or that any detail of the work had been properly performed, in case the fact should be otherwise, or so as to preclude any action for damages against the plaintiff, should the work and materials required not be performed and furnished in a substantial, workmanlike manner and a proper quality, or should the contract not be faithfully executed in every respect.

Attached to the contract was a schedule showing the material the plaintiff was to furnish. The terms of this agreement were arranged and settled between Henry A. Ramsay, representing the plaintiff, and William A. Rowan, acting on behalf of the defendants. The agreement was sent to New York to be signed by the proper officer of the plaintiff, and returned to the defendants in Baltimore for their signatures. The contract was signed by the president of the plaintiff company and returned to the defendants, who declined to execute it, because of certain changes which had been made in the contract by Mr. Ramsay. These changes have no bearing upon the questions before us, and need not be discussed, as it is conceded that the agreement of June 23rd, 1904, is correctly set out in the record, and is the contract agreed upon by the parties acting through their authorized agents. The plaintiff, without waiting for the agreement to be signed, began at once the preparation and furnishing of material for the building.

Subsequent to the agreement the plaintiff discovered that the plans upon which its bid was based were not the correct and approved plans in accordance with which the building was to be erected, and that the approved plans differed in some important respects from those in its possession. The approved plans and specifications, although introduced in evidence, do not appear in the record, and we cannot tell exactly and in all particulars the difference between the two sets of plans; but it does appear that according to the approved plans flitch plates and cleanout doors were to be furnished. These requirements were not shown upon the plans in the plaintiff's possession at the time it entered into the agreement. It also appears that by the approved plans, the timbers, which were to go into the wall boxes, were made two inches wider.

Mr. Ramsay testified that on the 23rd of June, 1904, when the contract was made, Mr. Rowan assured him that the drawings which he had received from the architects on the 28th of April, 1904, were correct, and that he relied upon that statement, and that Mr. Rowan further stated that there would be no delay, because the drawings which we had were all right, and that upon this assurance, the plaintiff, under the verbal order of Mr. Rowan, proceeded at once with the work. This testimony was denied by Mr. Rowan; but that raised an issue of fact for the jury, under proper instructions from the Court as to the legal effect of those statements, if the jury found they were made, upon the rights and obligations of the parties under the contract. On the 28th of June, 1904. the plaintiff received from the defendants a full set of the approved plans.

With this outline of the main facts in the case before us we will consider the exceptions to the admissibility of the testimony. The refusal of the Court to admit in evidence the "general conditions" which appear in the record is the ruling complained of in the first exception. These "general conditions" were sent by the architects to persons who were invited to bid for the construction of the entire building, and relate to a variety of subjects, and set out with much particularity a great number of obligations to be assumed by the builder to the owners. There is nothing to connect the plaintiff with these conditions. They were not discussed by the parties, and it would be most unreasonable to suppose that the plaintiff intended to assume obligations and to be bound by conditions which have not the remotes bearing upon the subject matter of its contract with the defendants. It had agreed to furnish and erect all the cast iron, steel and ornamental iron work described in the contract in strict accordance with the plans and specifications prepared by Wyatt Nolting, the architects, and to subject it, under the circumstances, to obligations of the nature specified in these "general conditions" would be an unwarrantable extension of its duty under the contract.

Counsel for the defendants say in their brief: "We cannot find in the reports of our State where this point has been directly passed on, but in the case of McCregor v. Ware ConstructionCompany, 188 Mo. 619, decided by the Supreme Court of Missouri, the Court there held that the "general conditions" of the specifications are to be taken as a part of any contract entered into by a contractor or sub-contractor, and that said contractor or sub-contractor, as the case might be, must be bound by the provisions thereof;" but the contentions made can find no support in that decision, because the case shows, that the general conditions, which the Court received in evidence, were embodied in and made a part of the contract between the original and sub-contractor. This circumstance clearly discriminates the cases, and deprives that decision of all persuasive authority in this case. Our conclusion, that the "general conditions" cannot be imported into the contract of June 23rd, 1904, is supported by the principle of the decision in the case of The Baltimore Ohio Railroad Company v. Stewart,79 Md. 487.

The Court admitted in evidence a statement and voucher sent by the defendants to the plaintiff on October 6th, 1906. This is the action complained of in the second, third, and fifteenth exceptions. The contention is that this statement and payment, which the Court admitted, was an offer of compromise on the part of the defendants, and should, therefore, have been excluded. The testimony objected to consisted of the statements prepared by the defendants purporting to exhibit the true state of the account between the parties, and showing a balance of $3,530.97 due the plaintiff, for which amount the defendants sent a check in full payment. The statement is as follows:

James Stewart  Company,
                       Engineers and Contractors,
               Pittsburg, St. Louis, New York, Baltimore.
                    To American Bridge Company, Dr.,
                   Place of Business — Pittsburg, Pa.
         For Supplies or Labor furnished to — Miller Building.
190'.
To contract for iron work erected complete above building ....... 28,500.00
Contra.
By charges as per bills rendered, 9.85, 3.93, 50.80, 5.95, 687.70,
28.20, 7.60 ...................................................    794.03
By Cash, 7-24, 3,600.00; 10-3, 8,400.00; 12-9, 5,600.00; 1-31,
5,200.00 ...................................................... 22,800.00
By Demurrage assessed account delays in deliveries and erection
...............................................................  1,375.00
Check herewith on a-c above contract ............................  3,530.97
Approved, W.A. Rowan.
Received of James Stewart  Co., thirty-five hundred thirty 97-100 ________
100 Dollars on a-c of the above account.
                               American Bridge Co. of New York.
W.H. Connell, Treasurer.

This statement and check were accompanied by a letter to the plaintiff in which the defendants stated that the check represented the balance due by them on account of the contract on the Miller Bulding, after deducting charges, previous payment and demurrage of $1,375.00 which was deducted in settlement with the owners. Inasmuch as the defendants by their additional plea were setting up counter charges amounting to more than $11,000, this statement showing claims aggregating less than $2,200, if admissible, was important evidence. There can be no doubt that offers of compromise are not admissible. The rule, as well as the reason npon which it rests, is clearly stated in the case of Biggs v. Langhammer, 103 Md. 94; but we do not find that the facts bring this statement and voucher within the rule. It is true that repeated efforts had been made by the plaintiff to have its claim paid. A meeting had been held in April, 1905, looking to an adjustment of this and other claims; but no settlement was reached. The defendants insisted that they had been subjected to great loss by reason of the plaintiff's failure to perform its contract; the plaintiff contended that it was in no manner responsible for the losses which the defendants claimed to have suffered. A number of letters passed between the parties in reference to the payment of the claim, the last of which was on the 11th of September, 1905, in which the defendants wrote that "your, Mr. Wells, and other Eastern representatives understand quite fully that it was their work that necessitated the payment by us of penalty, and we are quite ready to make a settlement as soon as we receive proper credit from you." Afterwards, on October 6th, 1905, they attempted to close the account by sending the statement and voucher of that date. The plaintiff refused to recognize the statement as correct, or to accept the check in full payment, and was told by the defendants that it might accept it in part payment without prejudice to the charges made.

The elements of a compromise offer are lacking in this transaction. As we read the record, it simply amounts to this: The plaintiff was asserting a claim in excess of what the defendants claimed to be due, and afterwards a number of futile efforts had been made to adjust the matter, the defendants determined to settle it upon the basis of its own account, and, therefore, sent the statement and check in full payment, and in reply to a letter from the plaintiff, declining to accept the check in full satisfaction, told it, in effect, that it might apply the check on account if it saw fit, and, to use their own language, "straighten out" the difference between them in some other way.

The fourth, fifth, sixth, seventh, tenth, eleventh, twelfth, thirteenth, fourteenth, and sixteenth exceptions relate to the exclusion of certain opinion evidence on the question of damages, taken subject to exceptions. As appears by the last item of the defendant's additional plea they were claiming the sum of $8,000 for additional costs incurred by them "in erecting said building, by reason of the manner of construction made requisite and the delay occasioned by the failure of the plaintiff to furnish the material when and as required by the defendants and in accordance with the understanding and agreement had with the plaintiff." A great amount of evidence was taken upon this claim, and the additional costs which the defendants claimed to have incurred was capable of reasonably definite and certain ascertainment. They claim to have paid this additional cost, and the evidence shows that they had in their possession memoranda showing the extra cost in some instances, and if they did incur this additional cost the fact should have been established in the ordinary way. The question at issue was, what amount of additional cost, if any, the defendants did in fact incur by reason of the plaintiff's default, and not what it would have caused in the opinion of experts, especially as they were basing their opinions in some important particulars upon an assumed state of facts of which there was no evidence. The testimony, which the Court excluded, was vague, uncertain, and speculative and misleading, and well calculated to have resulted in great injustice to the plaintiff.

The seventeenth exception was taken to the action of the Court in admitting in evidence the reports of certain superintendents of Wyatt Nolting, made under the circumstances alluded to in an earlier part of this opinion. The defendants contend that the testimony of the persons who made these reports should have been taken under a commission; but manifestly this would have been a useless and unavailing proceeding, as the reports about which the witnesses would have been examined were not in the possession, or control of the plaintiff; but were the property of Wyatt Nolting, and the plaintiff had no power to produce them before a commissioner in another jurisdiction. The Court, under the authority of the case of Heiskell v.Rollins, 82 Md. 14, and other cases in this State, was clearly right in admitting these reports.

The eighteenth exception was taken to a question asked the witness Stringer about the interview between the parties in the case which took place in Baltimore in April, 1905. We see no objection to this question, or to the answer of the witness, and, as the exception was not noticed in the brief of counsel, or in their argument, we presume it was abandoned.

This brings us to the consideration of the action of the Court upon the prayers which is the subject of the nineteenth, twentieth and twenty-first exceptions. The instructions given by the Court need not be particularly discussed in this opinion, but the reporter is requested to set them out in the report of the case. The principal and practically the only legal question of any moment in the case is this: Was the plaintiff bound under its contract of June 23rd, 1904, to furnish and erect those items of cast iron, steel, and ornamental iron work called for by the approved plans which did not show upon the plans in its possession at the time the contract was made? The Court instructed the jury that the plaintiff was so bound; unless the jury found "that, in the interview between Major Ramsay and Mr. Rowan on the 23rd of June, 1904, said Rowan was apprised of the fact that the plaintiff had received certain plans from Wyatt Nolting, and assured said Ramsay that those plans were all right, and were the plans referred to in the contract made on the said date, and that the plaintiff could have at once commenced the carrying out on his part of the contract according to said plans which it then had;" and the Court further told the jury that the plaintiff would be bound by the approved plans of Wyatt Nolting, notwithstanding they found that Mr. Ramsay made such statements to Mr. Rowan, if the jury further found "that a copy of said approved plans of Wyatt Nolting was furnished to the plaintiff at such time and under such circumstances that the plaintiff, by the exercise of ordinary prudence and care, such as reasonably careful business men generally exercise in similar transaction, should have known before the respective position of the parties had substantially changed by reason of the past execution of the said contract, that the plans as finally approved by Wyatt Nolting were different from the plans that had been obtained from said architects as aforesaid previously to June 23rd, 1904."

This is the legal principle upon which the first and third instructions of the Court is based, and is the underlying principle of the defendant's second and third prayers, as modified by the Court. We think the legal principle stated in these instructions is sound and evidently just; because, if such assurances were made by Mr. Rowan, it would be a fraud upon the plaintiff's rights to permit the defendants to set up any difference between the two plans, unless the jury found the qualifying facts stated by the Court, in which event the plaintiff should be estopped to insist that they were not bound by the approved plans. These instructions gave the jury a correct guide for dealing with the charges for flitch plates, cleanout doors, and other items shown upon the approved plans and which did not appear upon the plans in the possession of the plaintiff on June 23rd, 1904, and for the costs of providing such articles the defendants had made claim in their additional plea. All the other charges for which a credit is claimed in that plea, except the last item, are fully and clearly dealt with in the Court's second instruction.

The Court's fourth instruction deals with the extra charges included in the plaintiff's account, and we see no objection to it. The defendants' tenth prayer, as modified, states clearly and correctly the conditions of fact under which the defendants would have a right to recover the $1,375 paid as a penalty to the owners; and their eleventh prayer, as modified by the Court, correctly states the conditions under which the defendants should be allowed the additional cost incurred by them by reason of any failure by the plaintiff to perform its contract.

We do not deem it necessary to discuss the prayers submitted by the defendants, because, from a careful consideration of the whole record, we are of the opinion that the case was fairly submitted to the jury under the instructions granted.

Judgment affirmed with costs above and below.