Brown-Randolph Co. v. Gude

106 S.E. 161, 151 Ga. 281, 1921 Ga. LEXIS 221

• Court: Supreme Court of Georgia
• Decided: January 13, 1921
• Docket: No. 2032
• Status: Published

Opinions

Hill, J.

(After stating the foregoing facts.) Brown-Bandolph Company owned a city lot on the southwest corner of Marietta and Forsyth Streets in the City of Atlanta, on which it decided to construct a building. Before the written contract for the construction was entered into, Gude & Company addressed the following letter: “Atlanta, Ga., June 28th, 1917. Mr. A. Ten Eyck Brown, Architect, Forsyth Building City. Dear Sir: — In-regard to the building you propose to have erected on the southwest corner of Forsyth and Marietta Streets, this city. We have made a careful estimate of the cost from your plans and outlined specifications, and we find that the building will cost completed, including all mechanical equipment, elevators, electric fixtures, etc., $375,000 including our commission, but not including the architect’s commission. Very truly yours, Gude & Company.” On July 30, 1917, a contract was entered into between Gude & Company and Brown-Randolpli Company, the material portions of which are given in the foregoing statement of facts. In this contract no express reference is made to the letter from Gude & Company to A. Ten Eyck Brown, just set out. The present equitable petition was filed by Brown-Randolph Company against A. V. Gude as surviving partner of Gude & Company, the Trust Company of Georgia as executor of A. V. Gude Sr., and A. Ten- Eyck Brown, praying for an accounting; for cancellation of the alleged claim of lien and all notes in the hands of the defendants, given by the plaintiff, which represented any sum in excess of the amount that might be found to be due by plaintiff tó Gude & Company; and for injunction against assigning or transferring as security any of the notes, given by plaintiff, in the possession, custody, or control of defendants, and against interfering with the plaintiff’s possession of the property, or asserting against plaintiff any claim in any proceeding other than the present cause. The petition was demurred to on general and special grounds. The court sustained the general demurrer and dismissed the petition, and the plaintiff excepted. The court held that the plaintiff had a complete remedy at law, and that a court of equity had no jurisdiction of a case like the present.

In the view we take of this case, regardless of whether a court of equity or a court of law has jurisdiction, the controlling question is whether the petition sets out a cause of action against the defendant. It will be observed that the letter written by Gude & Company to A. Ten Eyck Brown was not addressed to the plaintiff in this case, and it nowhere expressly appears -that A. Ten Eyck Brown was the agent of the plaintiff. In order for the plaintiff to recover on the basis of the letter being made a part of the contract, it must appear that A. Ten Eyck Brown was the duly constituted agent of the plaintiff, and that the letter was a part of the contract. As stated above, the letter is not referred to in the contract expressly or by necessary implication; and therefore the letter cannot be said to be a part of the written contract of July 30, 1917. It will be seen from the terms of the written contract itself that the contractors, “ for the consideration of actual cost plus a commission of ten per cent., will furnish all labor and material and all necessary estimates of cost, and will construct the owner’s proposed building,” etc. It was also agreed and understood that “ the building will be constructed and completed according to the plans and specifications and under the directions of A. Ten Eyck Brown, architect. In all cases of doubt or dispute as to the meaning of the plans and specifications, the architect’s decision shall be final. Also, “ that the estimates of the contractors made in writing from completed drawings and specifications and full information will be correct to the extent that the cost will not exceed the estimate more than 5 per cent.” It is contended by the plaintiff that the contractor, Gude & Company, guaranteed to construct the building at a total cost of $375,000, as stated in the letter of June .28, 1917. But it will be observed that when this letter was written there was no written contract between Brown-Bandolph Company and Gude & Company, and, so far as appears in the record, there were at that time no " completed drawings and specifications and full information.” It is true that in the amendment to the petition it is alleged that the letter of June 28 was a part of the contract of July 30; but such allegation must be construed as a mere conclusion of the pleader, or as an effort to vary the terms of the written contract, as there is nothing in the contract itself to justify this allegation and conclusion. The contract itself shows that the letter was not made a part of the contract, nor is there in the petition or either amendment' any allegation that when the estimate was made by Gude & Company on June 28 they had in their possession completed plans and specifications and full information. It is alleged that Gude “ had in his hands and possession all the information fromi the architect which said Gude & Company thought would be needed,” but no such plans and specifications are attached to the petition., nor is their substance therein set out. The estimates that were to'be binding were those made after completed plans and specifications and full information had been given to Gude & Company. The question, therefore, is whether the completed plans and specifications and full information as contemplated by the contract . were in the hands of the contractor on the date that the contract of July 30 was entered into and exeerited. Even if the letter of June 28 could be construed as a part of the written contract, it does, not show on its face that it was made from " completed plans and specifications and full information,” but that it was simply from “ outlined specifications.” We think that the facts alleged in the petition do not show that the letter of June 28 was a part of the contract (except as a conclusion of the pleader), and that the estimate of $375,000 made on that date was not the estimate provided for in the subsequently executed written contract of July 30, which is plain and unambiguous. If any previous negotiations between Gude & Company and the plaintiff were had, and they were consistent with the written contract, they will be construed as being merged into the contract; and if, on the other hand, any preliminary negotiations were had between the parties which were inconsistent with the written contract, they would be eliminated by the contract itself. But surely no preliminary estimates between Gude & Company and A. Ten Eyck Brown, before the execution of the written contract, could bind Gude & Company relatively to the plaintiff, in the absence of an allegation to the effect that the architect was the agent and acted for the plaintiff; and there is no such allegation in the petition. We cannot, therefore, look to the letter from Gude & Company to the architect as a basis for the suit, but must look to the words of the contract itself; and those words provide that “ It is .mutually agreed and understood that the contractors will complete the building within ten (10) months after they are given possession of the property and are furnished with complete plans and specifications and all other necessary information.” And under the contract of July 30 with Gude & Company the plaintiff was to pay actual cost of the construction of the building, plus a commission to the contractor's of ten per cent. It cannot be said that the contract of July 30 confirms the estimate made in the letter of June 28 from the contractors to the architect. .That was a tentative estimate, not made upon completed plans and specifications and full information, but only upon outlined plans and specifications, and, as already said, the contract of July 30 made no reference to the letter of June 28, but on the contrary an entirely new and different estimate was provided. The contract of July 30 provides for a totally different plan for estimating the cost of the building from the estimate of June 28, viz., “actual cost plus a commission of ten per cent.” It is insisted, however, that the original petition alleged that the estimated cost of the building of eight stories, as first contemplated, was $375,000. It is true that there is a general allegation to that effect; but if the contract of July 30 is examined, this conclusion will be seen to be without fouudation. It is only facts which are well pleaded that can be taken as true on demurrer. The petition and its amendments, therefore, taken as a whole, show that there was no estimated guaranteed offer of $375,000 on the part of the contractors for the construction of the first eight stories of the building. Under the express terms of the contract the building was to be built for actual cost plus ten per cent.

A building contract, to be valid, mu-st have the necessary element of certainty, the same as other contracts. Such a contract may be made sufficiently certain by reference to other documents, or to plans and specifications. But such reference must be sufficient to identify the documents or plans referred to. 4 Elliott on Contracts, § 3637, and cases cited; 6 R. C. L. 867, § 253. In Cruthers v. Donahue, 85 Conn. 629 (84 Atl. 322, Ann. Cas. 1913C, 221, 226, note), it was held: “Where there is a conflict between a building contract and the specifications, the former prevails.” In Willamette Steam Mills Co. v. Los Angeles College Co., 94 Cal. 229 (29 Pac. 629), it was held: “ Code Civil Proc. see. 1183, provides, inter alia, that where the amount to be paid for any building exceeds $1000.00 the contract shall be in writing, signed by the parties, and ‘ shall, before the work is commenced, be filed in the office of the county recorder.’ Held: That where a contract provided for the erection of a building ‘ conformable to drawings and specifieations . . hereto annexed,’ but the drawings and specifications were not filed with the contract, the contract was void, and cannot serve as a basis in determining the rights of those claiming mechanics ’ liens on the building.” See also division 2 of the opinion. In Donnelly v. Adams, 115 Cal. 129 (46 Pac. 916), it was. held: " Where a building contract refers, for a description of the buildings to be erected, to certain plans and specifications of the architect, ! which are signed by the parties hereto,’ such plans are an essential part of the contract, without which it is incomplete, and cannot form the basis of a recovery; and where there are no plans ‘ signed by the parties,’ the contract cannot be completed by parol evidence to identify others as the ones referred to.”

The contract of July 30 does not refer specifically to the letter and estimate of June 28, and, as previously stated, the contract is unambiguous. Consequently it cannot be varied by parol evidence, so as to include in it the estimate of June 28. Standing alone, the contract provides a complete working basis for the cost of the building, which is cost plus ten per cent, commission. Besides, it will be observed that the language of section 3 of the contract provides that the estimates of the contractors made in writing from "completed drawings and specifications and full information will be correct,” etc., thus showing that the completed drawings and specifications contemplated did not refer to the past, but to the future; and that language also applies with equal force with reference to the "estimate,” not that which had been made, but that which was to be made in the future. If completed plans and estimates had already been made, in all probability they would have been attached to the contract, or would have been referred to by express and definite reference.

As to the second contract for the two additional stories, it is insisted by the plaintiff that the petition alleges that the defendants fraudulently incorporated in the estimate of cost that they submitted to the plaintiff two items which were covered by the original contract, and that the plaintiff discovered this fact after the institution of the present litigation; also that the petition alleges that the two officers of the plaintiff were attorneys, neither of whom was familiar with the construction of buildings, and they did not know, at the time the contract for the additional two stories was entered into, that the defendants had fraudulently padded the second estimate with these two. items amounting to nearly $40,000; and that these allegations are to be taken as true on demurrer, and if this is done the plaintiffs are entitled to have the second contract reformed and these two items stricken. It is true that fraud upon one side and mistake upon the other in the execution of a contract is the legal equivalent of a mutual mistake; and that where these two things occur, equity has jurisdiction to reform such written instrument. Venable v. Burton, 129 Ga. 537 (59 S. E. 253); Gabbett v. Hinman, 137 Ga. 143 (72 S. E. 924). But by reference to the petition itself it is found that the plaintiffs, by way of amendment to their petition, allege that G-ude & Co. took advantage of the then situation, and in preparing the estimate of costs for these two additional stories, “deliberately, illegally, and in defiance of the contractual right of this plaintiff, attempted to so word said estimate for the additional two stories as to include two items which constituted part of the contract for the original eight stories. Said estimates will be exhibited to the court, and it will be observed that it is headed: c Two Additional Stories and Advance in Labor and Material, Transportation Building, Atlanta, Georgia.’ The words f Two Additional Stories and ’ being in red ink, and the words ‘Advance in Labor and Material’ being in blue ink. The first item of this estimate is Advance in Labor and Material, $36,205.00; the fourth item is Sidewalk Lift, $1,800.00.” So it is contended that when the second contract was signed for the construction of the two additional stories it contained two items which are now objected to as being fraudulently inserted by the defendants, and that such alleged fraud on the part of the defendants and the mistake of the plaintiff in overlooking the same amounted to a mutual mistake, and that such mutual mistake should be relieved by a court of equity reforming the contract to meet the facts as they aTe alleged to be by the plaintiff. We cannot agree to this contention. The additional estimate was not only in writing but it was signed by the plaintiff; it is plain and unambiguous, a portion of it was written in red ink and a portion in blue ink, so as to attract the attention of both parties to the contract. Parties to a contract who are competent to execute and make it are supposed to know what such contract contains, and the legal effect of it. Prom the allegations of the petition-as indicated we do not think that such a case of fraud is alleged on the one side and mistake on the other as would justify a court of equity in reforming the contract.

From what has been said and the authorities cited, we reach the conclusion that the petition does not allege facts sufficient for a recovery against Gude & Company, on the basis of $375,000 guaranteed cost of the first eight stories of the building, as insisted by tbe plaintiff. The petition therefore does not set out a cause of action; and it is immaterial whether the suit sounded in equity or at law. The judge did not err in sustaining the general demurrer and in dismissing the case.

Judgment affirmed.

All the Justices concur, except Fish, G. J., mid Beclc, P. J., dissenting, and Gilbert, J., disqualified.