Mercantile Trust Company v. Hensey

The Mercantile Trust Company, by this writ of error, seeks to review a judgment of the court of appeals of the District of Columbia, affirming a judgment against it of the supreme court of the District for the sum of $8,468. The action was brought upon a bond for $50,000 executed January 24, 1900, by the company as surety for one Jones, for the performance by him of a written contract entered into on the same date between him and the defendant in error, who was the plaintiff below, relative to the completion by Jones for the defendant in error of certain houses already in process of construction in the city of Washington. The condition of the bond was, in substance, that if the principal, Jones, should duly and faithfully perform and fulfil all the conditions of the contract entered into between him and the defendant in error the bond was to be void, otherwise to remain in force.

The contract provided that Jones, for the consideration mentioned therein, would, within seven months from the date thereof, well and sufficiently erect and replace all defective work and finish the twenty-one brick dwelling houses mentioned 'agreeably to the drawings and specifications made by Melville D. Hensey, architect, and which plans and specifications are signed by the said parties hereto and hereunto annexed, within the time aforesaid, in a good, workmanlike, and substantial manner, to the satisfaction and under the direction of Bates Warren, or the architect placed in charge by him to be testified by writing or certificate under the hand of Bates Warren, or the architect placed in charge by him, and also shall and will find and provide such good, proper, and sufficient material of all kinds whatsoever as shall be proper and sufficient for the completing and finishing all of said twenty-one houses and other works of the said buildings mentioned in the said specifications for the sum of $89,250, to be paid as set out in the schedule of payments hereto annexed, and signed by the parties hereto and made a part hereof.' Hensey, 'in consideration of the covenants and agreements being strictly performed and kept by the said party of the second part as specified,' agreed to pay the contractor the above-named sum 'as the work progresses, in the manner and at the time set out in the schedule of payments hereto annexed and signed by the parties hereto and made a part of this agreement; provided that in each of the said cases a certificate shall be obtained from and signed by the architect in charge that the contractor is entitled to payment, said certificate, however, in no way lessening the total and final responsibility of the contractor; neither shall it exempt the contractor from liability to replace work if it be afterwards discovered to have been ill done or not according to the drawings and specifications, either in execution or materials; and, further, that the party of the second part shall furnish, if required, satisfactory evidence that no lien does or can exist upon the work.' The last payment provided for in the contract was to be made 'when the houses are fully campleted in accordance with the said agreement and the plans and specifications prepared therefor.' All the materials were to be new and of the best quality, and the contractor was to 'execute and complete all the work as set forth in the specifications and drawings in the best and most workmanlike manner.' It was agreed that 'in all cases of doubt as to the meaning of the drawings reference is to be made to the architect in charge, whose decision will be final.'

Although this contract was entered into in January, 1900, and under it the houses were to be completed in seven months, yet, for some reason, Bates Warren, the person named in the contract, did not appoint an architect until April, 1901, when he appointed Mr. W. J. Palmer. The evidence given, on the part of the plaintiff tended to prove that the contractor, Jones, abandoned the work on the houses early in the fall of 1900, leaving them uncompleted, and the work was otherwise carried on during the following winter, but that there was no architect in charge until Mr. Palmer's appointment. From that time Mr. Palmer seems to have in some degree superintended the work, and on the 29th of July, 1901, reported in writing to Mr. Warren the completion of the houses in question. In his letter Mr. Palmer said: 'The work has been done according to my interpretation of the plans and specifications, and where deviations have been made from the plans and specifications it has been where the same were inconsistent and ambiguous, and in all cases of inconsistency and ambiguity the work has been done according to the interpretation most beneficial to the houses.'

This action was subsequently commenced for the purpose of recovering the damages which the plaintiff Hensey alleged he had sustained by reason of the failure of Jones to fulfil and carry out the contract. Issue being duly joined between the parties, the plaintiff gave evidence tending to prove that the houses were not completed within the contract time, nor according to the plans and specifications in the particulars stated, and that the value of the houses was between two and three thousand dollars less on each house than it would have been had they been completed according to the contract, plans, and specifications. The defendant duly objected to such evidence and took exceptions to its admission.

A verdict was rendered in favor of the plaintiff in the sum of $8,468, after allowing the defendant's claim of set-off of $29,032.

Messrs. Hayden Johnson and John Ridout for plaintiff in error.

Messrs. Arthur A. Birney and Henry F. Woodard for defendant in error.

Statement by Mr. Justice Peckham:  Mr. Justice Peckham, after making the foregoing statement, delivered the opinion of the court: