Manett-Seastrunk v. Terminal Bldg. Corp. of Dallas

BAROUS, J. Appellants entered into a written contract with appellee to do the electrical work on what is known as the Terminal Building in Dallas, for an agreed price of $78,645.50. Said contract provided that ap-pellee would pay appellants on the 1st and 15th of 'each month 90 per cent, of the value of the work done and material placed on the ground, upon certificates issued by the architect. The contract further provided that ap-pellee could order extra work done or make any changes in the original plans and specifications, and provided that the value of such extra work, where not agreed upon, should be determined: (c) By cost and percentage, or by cost and fixed fee; and provided that appellants as contractors “shall keep and present in such form as the architect may direct, a correct amount of the net cost of labor and materials, together with vouchers.” The contract provided that, before the . architect should issue a certificate for the payment of any sum due under the original plans and specifications, the contractor should submit to the architect an application for each payment, and, if required, submit receipts or other vouchers showing his payments for material and labor, and submit a statement based upon the original schedule, itemized in such form [787] and supported by such evidence as the architect might direct, and provides that the architect shall upon such proof issue to the contractor a certificate for such amount as he (the architect) decides to he properly due. The contract further provides that the architect could refuse to issue a certificate for several reasons, among others: (d) A reasonable doubt that the contract could he completed for the balance unpaid. Article 12 of the contract provides: “ * ⅞ ⅜ If the architect shall fail to issue any certificate for ten days after it is due, and the owner shall fail for twenty days after written notice of such fault by architect to have such certificate issued and the amount due thereunder paid ⅜ ⅜ * then the contractor may upon seven days written notice to the owner and the architect, stop wort or terminate this contract, and recover from the owner payment for all work executed and any loss sustained upon plant, materials, materials contracted for, and reasonable profit on work completed to that date.” Under said contract appellants began work in the fall of 1923, and continued until October, 1925. During the construction of the building, a number of changes were made in the plans and specifications relative to the electrical work, which materially enhanced the cost thereof. Appellants presented at intervals twenty-two estimates prior to March 1, 1925, totalling $89,605.06, and same were paid, less $8,960.50, the 10 per cent, withheld under the terms of the contract. Between March 1st and July 9th appellants submitted their estimates 23 to 2S, inclusive, each of said estimates for the total amount claimed by appellants to be due for work done and material furnished both under the original contract and for extra work. Neither of said estimates was approved by the architect, and neither of them was paid by appellee. During said time, however, appellee made payments to appellants on account as follows: April 5th, $5,000; June 8th, $3,000; and July 8, $5,369.66. The twenty-eighth estimate, being the last one filed by appellants with the architect, was dated July 9th, under which appellants claimed that there was due them, after allowing the credits for advancements above set forth, $27,986.64. Said estimates showed that the work called for in the original contract lacked $7,500 of being completed, and that the extra work called for by order No. 1 lacked $1,000 of being completed. It further showed that appellants had been paid for work done on the contract a total of $91,-423.11. The architect refused to issue a certificate for any portion of said estimate. Appellants continued from the time they ‘ filed said estimate No. 28 on July 8, 1925, to work on said building until October 16th, claiming that during said time they did approximately $28,000 worth of additional work. On October 16th appellants ceased to work on said building, and abandoned their contract, claiming that appellee had breached its part of said contract by having refused to pay their estimate No. 28, as required under provision No. 12 of the contract, quoted above. The record shows that on September 5, 1925, appellants wrote appellee that the architect had refused to issue a certificate on their estimate No. 28, and demanded that appellee pay the amount of said estimate. On- October 9th appellants wrote appellee and the architect that, since estimate No. 28 had not been paid, they would, at the end of 7 days from said date, stop work and terminate said contract. In conformity therewith, appellants did on October 16th quit work, and on November 10, 1925, they instituted this suit against appellee to recover on quantum mer-uit for the work they had done and the material furnished in the installation of the electrical engineering work on said Terminal Building; appellant’s theory being that, since appellee had breached the contract by failure to pay estimate No. 28, they could abandon the contract and recover from appellee the reasonable market value of the material furnished and the work done under the contract in its entirety, which they alleged to be $189,-829.58, and on which they alleged they had been paid $95,415.16, and they asked for judgment for the unpaid portion to wit, $94,-414.12. Appellee contends that it was not in default in refusing to have, the .architect issue a certificate on estimate No. 28, or in refusing to pay said estimate, and contends that appellants were in no position to demand the issuance of a certificate on said estimate or the payment thereof, because they had failed and refused to submit either to the architect or to appellee the invoices showing the net cost ¡price of labor or the material used for the extra work, and that by reason thereof there was no way for either the architect or for appellee to check and determine whether said estimate was correct or whether there was anything due thereunder. Appellee further alleged that, after appellants had abandoned their contract, it was, required to and did complete the work called for under said contract at a cost of $8,000, and that it was entitled to retain said amount out of any sum which appellants might recover. The cause was tried to a jury, and at the conclusion of the testimony the trial court indicated that he thought, under the undisputed facts, appellants were not entitled to recover on the cause as alleged for quantum meruit, but that he thought on equitable grounds they should, if possible, recover the $28,960.89 which appellee admitted was due them as the unpaid balance for the work done under the contract, after allowing appellee the amount it had been required to pay to complete said contract, and thereupon appel-lee filed a trial amendment, tendering said [788] amount to appellants, and the court then Instructed the jury to return a verdict in favor of appellants against appellee for said amount, and judgment was entered in accordance therewith. Appellants did not sue on the contract, and made no claim thereunder. Their sole contention is that appellee breached the contract by having failed to make a payment on their estimate No. 28, and that, since appellee did breach said contract, they had a right to abandon the same and sue on quantum meruit for the reasonable market value of the labor and material furnished in the construction of the work they had done. Appellants contend that the trial court should have as a matter of law instructed the jury that appellee had breached the contract, and that appellants were entitled to recover the amount sued for; and, in the alternative, they contend that the trial court should have submitted to the jury the question as to whether appellee had breached the contract, and, if so, the reasonable market value of the material and labor furnished by appellants on said work. We do not agree with either of appellants’ contentions. The contract under which appellants were working provides specifically that, in determining the amount they are to be paid for labor and material furnished in doing extra work, they must keep -and furnish to the architect the net cost of the labor and material used. Without this date it was impossible for the architect or appellee to determine what amount appellants were entitled to receive for the extra work done. At the time estimate No. 28 was submitted, appellants had received $91,423.11 on a contract which only called for, exclusive of the extra work done, $78,645.50. The record shows without dispute that the architect had for several months endeavored to obtain from appellants the invoices showing the net cost of the labor and material used on the extra work, and had endeavored to check the invoices furnished and the information given, and had not been able to determine said amount. Appellants testified that they did not furnish appellee the invoices showing the net cost of the labor and material used on the extra work, prior to October 7, 1925, some 3 months after said estimate 28 was filed with the architect, and only 8 days prior to the time appellants abandoned the contract and refused to complete same. Appellants further testified that for the extra work done they had embraced in the estimates submitted from 20 to as (much as 300 per cent, more than the actual net cost of the material that they had used in doing said extra work. Appellants pleaded that they had so kept their books that they were unable to tell what material and labor they had used in doing the extra work and what had been used in carrying out the original contract, and that they could not tell whether the amount claimed in their estimate No. 28 was for extra work, or whether it was partly for work done under the original contract. The only portion of the contract which authorized appellant to abandon same because of breach thereof by appellee is embraced in article 12 before quoted, to the effect that, if the architect failed to issue a certificate for 10 days after it was due, and the owner failed for 20 days after written notice of such fault by the architect to have the certificate issued and the amount due thereunder paid, the contractor could then, upon 7 days’ written notice, stop work and terminate the contract. The cardinal rule in the construction of contracts is that same must be construed as a whole. Another cardinal rule is that one party to a contract is not justified in a breach or an abandonment thereof, unless he has either complied with his portion of the contract, or tenders performance thereof. 6 R. O. L. p. 944; 13 O. J. pp. 627, 648 and 662 ; 5 Page on Contracts, 4651. Page on Contracts, supra, uses this language: “A contractor who has reserved the right to stop work in case of the failure of the owner to pay the installments then due under the contract, cannot take advantage of such breach of condition on the part of the owner if he himself has not performed the terms of the contract.” We think the clear intention of the parties to the contract involved herein was that neither the architect nor appellee was required to issue a certificate or pay an estimate for extra work, until and unless in connection therewith appellants furnished the net cost of the labor and materials used therein. Until said information was furnished, neither the architect nor appellee had any basis upon which to figure or determine whether there was anything due under the estimate claimed. Appellant’s theory is that, regardless of whether they furnished any information to the architect or appellee relative to the net cost of the labor and material used, they were entitled to have a certificate issued and paid for at least a part of the estimate claimed, regardless of whether there was anything due or not; their contention being that, if they did put in an estimate when nothing was due and appellee should then pay said estimate, after the work was all completed, and it should be determined they had received more money than they were entitled to, appellee could recover from appellants and their bondsmen for such sums as they had received over and above the amount they were entitled to. This, to our mind, would be indeed a strange doctrine and a very strained construction to be placed upon the contract, which provided specifically that appellee had [789] a right to, and, in order to hold the bondsmen, was required to, retain at least 10 per cent, of the amount due appellants until the contract was fully performed. Appellants contend that they did as a matter of fact, on October 7, 1925, furnish appellee and the architect with the invoices showing the net cost of the labor and material used on the extra work, and that it was then appellee’s duty to have the certificate issued and the amount due on estimate No. 28 paid, and that appellee’s failure so to do justified them in abandoning the contract on October 16th. We cannot agree with this contention. While there is some evidence tending to show that appellants did furnish said information on October 7th, if as a matter of fact a full and complete invoice, giving said information, was furnished at said time, under the contract the architect had 10 days in which to check same over and allow or disallow the estimate, and appellee had 20 days thereafter in which to pay the estimate after it had been disallowed by the architect. Appellants in any event could not abandon the contract until the 30 days allowed appel-lee to pay same had expired after they had furnished the estimate and proof required in support thereof. Clearly appellants were not authorized to abandon the contract because estimate No. 28 was not approved and paid within 7 days after they furnished the invoices showing the net cost of.labor and ■material used on the extra work. We have examined all of appellants’ assignments of error, and same are overruled. The judgment of the trial court is affirmed.