Walsh v. Cornwell

Field, J. This is an action of contract brought in the Superior Court by an owner of land against a builder to recover damages for breach of a written agreement to erect a dwelling house thereon. The case was referred to an auditor whose findings of fact were to be final. The trial judge denied the defendant’s motion to recommit the report to the auditor and ordered judgment for the plaintiff for $4,900, with interest from the date of the writ, and the defendant excepted. The auditor found that the defendant entered into a contract with the plaintiff to build a dwelling house for the plaintiff to be completed in October, 1926, for $13,400, payable in instalments, that the plaintiff fully performed his part of the contract except the payment of the last instalment of $900, which amount he contends he is not required to pay because of nonperformance by the defendant, that because of the defendant’s “failure to build according to the plans and specifications serious defects resulted in the finished house,” that “if the house had been constructed according to the contract, plans and specifications, it would have been of the fair market value of $13,400 at the time fixed for completion in October 1926,” that “the fair market value of the house at the time fixed for completion . . . was $8,700,” that, if material, “it would have cost in October, 1926, at least $4,000 to tear down parts of the structure and rebuild it to accord with the terms of the contract, specifications and plans,” but “it would not be practicable and economical to make all alterations necessary to make the house conform” thereto, that the plaintiff actually expended $299.41, the reasonable cost of remedying certain minor defects, that he “made his last payment on October 23, 1926, then telling . . . [the defendant] that the house was in an unsatisfactory condition,” and the defendant then gave the plaintiff “a receipt . . . which indicated that . . . [the plaintiff] paid with reservations,” and that the plaintiff “moved into the house about October 28, 1926,” “about the time the house was completed.” The contract provided that payments should be made — 560 — by the owner, the plaintiff here, “only upon certificates of the Architects” and should be “due when certificates for the same are issued,” but that “no certificate given or payment made . . . , except the final certificate or final payment, shall be conclusive evidence of the performance of this contract, either wholly or in part, and ... no payment shall be construed to be an acceptance of defective work or improper materials.” There was also a section in the contract like that considered in Loftus v. Jorjorian, 194 Mass. 165, 168 (see also White v. Abbott, 188 Mass. 99, 100, 101, Norcross Brothers Co. v. Vose, 199 Mass. 81, 84, 85), authorizing the plaintiff upon default of the defendant; certified by the architect, to furnish labor or materials required by the contract or terminate the employment of the defendant and complete the work included in the contract, and providing that the “expense incurred by the Owner . . . , either for furnishing materials or for finishing the work, and any damage incurred through such default, shall be audited and certified by the Architects, whose certificate thereof shall be conclusive upon the parties,” and a section providing for arbitration if the “Owner and Contractor fail to agree in relation to matters of payment” or other matters not here material. The auditor found that the “architect did not supervise construction or issue certificates,” that he “had not supervised the work in its progress nor had he followed it in its progress, although he saw the house a few times while it was being built,” and that there was no evidence that the plaintiff “asked the architect to supervise” or that the defendant “took any action about supervision by the architect.” It was not found that any matter was submitted to arbitration. 1. There was no error in the denial of the motion to recommit. No ground for recommitting the report is shown by the record outside the report itself. It was within the judicial discretion to refuse to recommit the report on the ground of its form. In this aspect the refusal to recommit did not amount to a ruling of law. See Koch, petitioner, — 561 — 225 Mass. 148, 150. W. R. Grace & Co. v. National Wholesale Grocery Co. Inc. 251 Mass. 251, 253. The defendant’s contention that the report is incomplete because it does not set forth the contract as to which a question of interpretation is raised, is without foundation. A copy of a contract is attached to the declaration. This is sufficiently identified in the report as a copy of the contract made by the parties and is embodied in the report by reference. Nor can we say that the report does not set forth the provisions of the plans and specifications sufficiently to present the questions of law in issue. Recommittal because of the refusal of the auditor to reopen the case “for the purpose of hearing new and additional testimony” was discretionary with the trial judge (see Wells v. Wells, 209 Mass. 282, 291, W. R. Grace & Co. v. National Wholesale Grocery Co. Inc. supra) and no abuse of discretion is shown. Rulings by the auditor as to the admission and exclusion of evidence are reviewable by us on the exception to the denial of the motion to recommit. Lunn & Sweet Co. v. Wolfman, 268 Mass. 345, 348 and cases cited. In these respects, however, no error appears. The defendant’s offer to show a statement by the architect of the amount which, in his opinion, should be allowed by the defendant to the plaintiff for defects and the amount which should be paid by the plaintiff to the defendant for extras, was excluded rightly. The statement did not purport to be an architect’s certificate within the meaning of the contract. See Hennebique Construction Co. v. Boston Cold Storage & Terminal Co. 230 Mass. 456, 462. This evidence was merely hearsay as to the architect’s opinion. An engineer, called by the plaintiff, was permitted to testify as an expert. Some of his testimony, according to the report, was disregarded by the auditor. The question, therefore, whether, if this testimony was admitted wrongly, the report should be permitted to stand was not a matter of law reviewable here, but a matter solely within the discretion of the trial judge. Chelmsford Foundry Co. v. Shepard, 206 Mass. 102, 108. The other testimony of this witness that “he thought the house was then worth $9,000” — 562 — and “it would, in his opinion, cost $4,000 to make the house conform to plans and specifications, made up in part of $500 to correct the roof and $1,500 to cure the paint and plaster trouble,” was admitted properly. We cannot say, on the findings as to his qualifications, that he was not qualified to give this testimony. His opinion as to the value of the house was material on the issue of its value as left by the builder, an element in the measure of damages. Pelatowski v. Black, 213 Mass. 428, 430, 431. See infra. The defendant did not object to the testimony of this witness as to the cost of making the house conform to the plans and specifications, except on the ground that he was not qualified to testify, or to the admission of any of his testimony as immaterial because of the provisions of the contract as to an architect’s certificate. Similar considerations apply to the admission by the auditor, over the defendant’s objection, of other “evidence of the fair market value of the house as a structure on the date set for completion in October, 1926.” 2. There was no error in ordering judgment for the plaintiff, but judgment should have been ordered for $3,800 with interest instead of for $4,900 with interest. The auditor’s findings of fact stand upon the same footing as the verdict of a jury (Lunn & Sweet Co. v. Wolfman, supra), and no “cause appears or is shown to the contrary” why judgment should not be entered thereon, under Common Law Rule 30 (1923) of the Superior Court. See Marden v. Howard, 242 Mass. 350, 353, 355. The auditor found, a breach of the contract by the defendant and the elements of the plaintiff’s damages resulting therefrom. The defendant contends, however, that an architect’s certificate of the damages incurred by the plaintiff by reason of the defendant’s defaults, was a condition precedent to recovery by the plaintiff and that excuse for its absence was not pleaded or proved. Under the contract such defaults were to be considered by the architect in preparing his certificates for payments by the owner, but no such certificate except a final one was to be conclusive evidence of performance of the contract, wholly or in part. — 563 — Norcross Brothers Co. v. Vose, 199 Mass. 81, 95, explained in Hathaway v. Stone, 215 Mass. 212, 218. The only provision, however, for a certificate of damages incurred by reason of the defendant’s defaults, as such, is that above set forth, applicable only where the plaintiff upon default of the defendant, certified by the architect, furnishes labor or materials required by the contract or terminates the employment of the defendant and completes the work included in the contract. The plaintiff, unlike the owners in White v. Abbott, 188 Mass. 99, and Loftus v. Jorjorian, 194 Mass. 165, has not resorted to this remedy, and this provision for a certificate, therefore, is not applicable to this case. The defendant purports to have completed the house, though no certificate for payment, final or otherwise, has been issued, and the plaintiff contends that the defendant did not build it according to the terms of the contract. In these circumstances an architect’s certificate of damages due to the defendant’s defaults is not a condition precedent to recovery by the plaintiff and need not be pleaded or proved. Norcross Brothers Co. v. Vose, 199 Mass. 81. Nor is submission to arbitration made by the contract a condition precedent to the right to sue. Consequently such submission need not be shown, even if it is assumed that the question at issue is one of those covered by the provision for arbitration. Norcross Brothers Co. v. Vose, 199 Mass. 81, 94. Brocklehurst & Potter Co. v. Marsch, 225 Mass. 3, 9. The case does not appear to have been tried, and was not argued, on the theory that there was any “intentional departure from the contract in a material matter.” Divito v. Uto, 253 Mass. 239, 243. See also Smedley v. Walden, 246 Mass. 393, 400. Hence, the sum to be recovered as damages, if the full contract price had been paid, would be “the amount by which the value of the house as left by the . . . [builder] fell short of what that value would have been if the contract had been exactly performed.” Pelatowski v. Black, 213 Mass. 428, 430, 431. See also Moulton v. McOwen, 103 Mass. 587, 591, 598; Norway Plains Savings Bank v. Moors, 134 Mass. 129, 135; White — 564 — v. McLaren, 151 Mass. 553, 557, 558. Compare Gillis v. Cobe, 177 Mass. 584. Williston, Contracts, §§ 1480-1483, 1485. It has been suggested that this rule of damages is applicable when the defects are “of such a character as to diminish the value of the house but little, while to make the work conform literally to the contract would involve reconstruction at unreasonable and disproportionate expense.” White v. McLaren, 151 Mass. 553, 558. See also Gleason v. Smith, 9 Cush. 484, 486, 487. This rule, however, is equally applicable where, as the auditor found in this case, though the value of the house is materially diminished by the defects it is so built that “it would not be practicable and economical” to alter it so as to conform to the contract. This conclusion by the auditor is not necessarily inconsistent with his findings, that the value of the house was diminished by the defects to the extent of $4,700 and that it would have cost “at least $4,000” to alter it so as to conform to the contract. The auditor does not purport to determine precisely the cost of such alterations, but merely fixes the minimum limit thereto. The measure of damages urged upon us by the defendant, namely, that the amount to be deducted from the contract price is the “reasonable cost of completing the work,” is not applicable to the situation disclosed by the findings. It was pointed out in Pelatowski v. Black, 213 Mass. 428, 431, that this “well might be” the measure in a case “where a contractor has abandoned his work while yet unfinished, or has left undone some details merely which he ought to have supplied.” See also Gleason v. Smith, 9 Cush. 484, 487. This, however, is not such a case. Here the house was substantially completed and could not be made to conform to the contract without tearing down a considerable part of it. According to the rule of damages applicable 'here the amount to be deducted from the contract price was $4,700, the amount by which $8,700, the value of the house as left by the defendant in October, 1926, fell short of $13,400, the value (as found by the auditor, and not unsupported, as the defendant contends, see Parks v. Boston, 15 Pick. 198, 209, Westport v. County Commissioners, 246 Mass. — 565 — 556, 563) which the house would have had if the contract had been exactly performed. As the sum of the plaintiff’s payments on the contract was $900 less than the contract price, the amount otherwise to be recovered by him should have been reduced accordingly, that is, judgment should have been entered for $3,800 and interest from- the date of the writ. No further adjustment was required on account of expenditures by the plaintiff, as found by the auditor, aggregating $299.41, for remedying minor defects. These defects were remedied, so far as shown by the report, after the date as of which the value of the house as built was found to be $8,700. It follows that the defendant’s exception to the denial of his motion to recommit the report must be overruled, but his exception to the order of judgment for the plaintiff for $4,900 with interest from the date of the writ must be sustained. As, however, “all the facts necessary for determining the question in dispute” are before us, and from them it appears that judgment should be entered for the plaintiff for $3,800 with interest from the date of the writ, under authority of G. L. c. 231, § 124, such judgment is to be entered. So ordered.