D. C. Edwards & Co. v. Fisher

610 S.W.2d 546, 1980 Tex. App. LEXIS 4159
CourtCourt of Appeals of Texas
DecidedNovember 27, 1980
DocketNo. 17550
StatusPublished
Cited by4 cases

This text of 610 S.W.2d 546 (D. C. Edwards & Co. v. Fisher) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
D. C. Edwards & Co. v. Fisher, 610 S.W.2d 546, 1980 Tex. App. LEXIS 4159 (Tex. Ct. App. 1980).

Opinion

COLEMAN, Chief Justice.

This is an appeal from a judgment rendered in a suit involving a cost plus contract for the construction of a residence. Appel-lees, hereinafter called Fisher, were plaintiffs and cross-defendants in the trial court. D.C. Edwards, and wife, Marion Edwards, hereinafter called Edwards, were defendants and cross-plaintiffs therein. The jury found that neither party was entitled to damages and a take nothing judgment was entered as to both parties. Only Edwards has appealed.

D.C. Edwards & Company is solely owned by D.C. Edwards and his wife, Marion Edwards. The company is in the business of building custom houses. The Edwards and the Fishers were members of the same church and were friends. Edwards contracted to construct a residence for Fisher on a cost plus a 20% markup of the “costs of work” as defined in the contract. After the house was substantially completed, Fisher occupied it and refused to make further payments of invoices submitted by Edwards. Edwards filed a Mechanics and Ma-terialmans Lien Affidavit in the records of Waller County, Texas, and Fisher brought suit to set aside the lien and for damages. This petition was later amended to allege a cause of action under the Texas Deceptive Trade Practices and Consumer Protection Act. Edwards answered and asserted a cross-action alleging that some $140,000.00 was due him under the terms of the construction contract.

Seventeen special issues were submitted to the jury, and in answer to special issue number 17 the jury found that Edwards was not due any money for the substantial completion of the contract in addition to the amount already paid him.

The trial court then entered a judgment that Fisher take nothing from Edwards; that Edwards take nothing against Fisher; that the Mechanics and Materialmans Lien be cancelled; and that all costs be taxed equally.

Edwards asserts that the answer made by the jury to special issue no. 17 is so contrary to the great weight and preponderance of the evidence as to be clearly wrong. In response to this assignment of error, Fisher states:

“Much of Edwards’ argument goes to the amount of the subcontractors’ bills and the fact that Edwards paid those bills. These facts are not contested by Fisher. Fisher owed nothing to Edwards beyond what he had paid because Edwards did not deliver “proper performance” under the contract and because Edwards’ markups on the overhead and profits of his subcontractors was unconscionable.”

Section 5.1(a), Article V. of the contract provides:

[548]*548Owner shall pay to contractor for the performance of work and the furnishing of the materials under this agreement ... the sum of the cost of materials, labor and services, including contractor’s fee of 20% of the total cost of materials, labor and services (i. e. 20% of the Cost of Work)....
(b) 10% of all amounts payable to contractor hereunder, including contractor’s fee, shall be withheld by owner until thirty-one (31) days after architect has issued his certificate of final completion and owner has accepted the improvements.
... (e) The term “cost of work” shall mean costs necessarily incurred in the proper performance of the work and paid by the contractor. Such costs shall include the items set forth below:
... (iii) Payments made by the contractor to subcontractors for work performed pursuant to subcontracts under this agreement.

The contract further provided that the contractor shall have the right to subcontract any of the construction provided for in the contract.

The principal question is whether or not Edwards was entitled to charge 20% of the total bill of the subcontractors’ or whether he was confined to that portion of the subcontractor’s bid which reflected the actual cost to the subcontractor of the materials and labor performed. This question has been discussed in only a few eases and, apparently, none at all in Texas. In Grafton Hotel Co. v. Walsh, 228 F. 5 (4th Cir.1915), the court had before it a contract reading: “... the sum to be paid by the owner to the contractor for said work and materials shall be 10% commission on the cost of the work...." In construing this contract the court stated that “... the use of the term ‘cost of labor and material’ was intended to mean such amounts as might be paid by appellee for labor and material, and was not intended to include any profit that might be made by subcontractors due by their contracts with the appellee. In other words, it clearly appears from the contract that appellant was to pay only the cost of the labor and material necessary for the construction of the building and in addition thereto 10% as commissions. Such being the case, appellee would not be entitled to commissions on such labor and material as may have been allowed to the subcontractor....” Id. at 10.

The same result appears to have been, reached in the case of Bushnell v. Brand, 199 Ill.App. 542 (1st Dist. 1916). The full opinion was not reported but an abstract of the decision states:

“Where, under a contract remodeling a building, whereby the owner agrees to pay the contractor the actual cost of labor and material furnished plus a certain percentage thereof, the contractor lets out the work to a subcontractor, he is entitled to recover only the actual cost of such labor and material to said subcontractor plus a specified percentage thereon, and not the amount for which such contract was let plus such percentage thereon.”

On the other hand in Hamilton v. Coogan, 7 Misc. 677, 28 N.Y.S. 21, affirmed without opinion, 148 N.Y. 753, 43 N.E. 987. The Court of Common Pleas of New York City and County in 1894 held that where a building contract provides that the contractor shall receive as compensation the cost of labor and material used in the building, and 10% added thereto as profit, the amounts paid by the contractor on subcontracts for various portions of the work, including the customary profits of the subcontractors, will be considered as the cost of labor and material in estimating the amount due the contractor. The court stated: “... it is more reasonable to conclude that what the parties intended by the cost of labor and material was the actual charge of the several contracting mechanics for the portion of the work done by each, and his profit upon what he paid his workmen, and the price of the material they used, as it represented the necessary expenses of supervision and skill in directing the performing the work in a workmanlike manner, and the maintenance of facilities for the proper performance of his contract ... the common understanding of the cost of labor and material in the [549]*549erection of such a structure as was contemplated in the contract of the defendant is the customary charge of contractors for doing such work and furnishing such material.... ” Hamilton v. Coogan, supra, was followed in Churchill v. Anderson, 128 F.Supp. 425 (W.D.Ky.1955).

When a building contract is in writing and is free from ambiguity, its construction is a question for the court and not for the jury. Where a contract is so worded that it is susceptible to a certain legal meaning, it is not ambiguous. City of San Augustine v. Roy W. Green Co., 548 S.W.2d 467 (Tex.Civ.App.—Tyler 1977, writ ref’d n.r.e.).

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610 S.W.2d 546, 1980 Tex. App. LEXIS 4159, Counsel Stack Legal Research, https://law.counselstack.com/opinion/d-c-edwards-co-v-fisher-texapp-1980.