Leiter v. Dwyer Plumbing Co.

133 P. 1180, 66 Or. 474, 1913 Ore. LEXIS 356
CourtOregon Supreme Court
DecidedJuly 29, 1913
StatusPublished
Cited by10 cases

This text of 133 P. 1180 (Leiter v. Dwyer Plumbing Co.) is published on Counsel Stack Legal Research, covering Oregon Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Leiter v. Dwyer Plumbing Co., 133 P. 1180, 66 Or. 474, 1913 Ore. LEXIS 356 (Or. 1913).

Opinion

Mr. Justice Bean

delivered the opinion of the court.

The theory of the defendant, as pleaded in its answer, was that the 1st day of February, 1906, was made the date for the completion of the work covered by the subcontract by reference being made therein to the general contract, and since the general contractors failed to prosecute the balance of the work to such an extent as to enable the subcontractor to perform its part of the work by the 1st of February, 1906, no obligation rested upon it to install the work thereafter. This construction of the contract contended for ignores the provision of the original contract whereby the government, acting by its supervising architect, was empowered to suspend any of the work, and, in the event that this was done, that the contractor should be allowed an additional time equal to that of the suspensions. The original contract also provided that the government could make any changes or additions in the work as it desired. We thus find that the general con[479]*479tract in effect made provisions for the building to be completed by February 1, 1906, with the provisos that the supervising architect could suspend the whole or any part of the work whenever in his opinion it was necessary for the purposes or advantage of the work, and that the government could make such changes as it desired. Such alterations might necessitate a delay in the completion of the building and would not release the surety. De Mattos v. Jordan, 15 Wash. 378 (46 Pac. 402); Drumheller v. Amer. Surety Co. of N. Y., 30 Wash. 530 (71 Pac. 25); Ovington v. Ætna Indemnity Co., 36 Wash. 473 (78 Pac. 1021). The time of all suspensions and other delays caused by the United States was by the terms of the contract to be ascertained and allowed by the supervising architect. The effect of the contract was to leave the matter of suspensions and other delays entirely with the government.

1. The plaintiffs introduced evidence tending to show that the United States suspended work on the building from October, 1904, to October, 1905, on account of the regrading of the street, and made about 40 changes in the plans and specifications of the building, causing delays. Mr. Grant, who superintended the work under the direction of the supervising architect, testified that the work on the building was suspended by order of the United States; that the government caused a great many delays in the progress of the construction by the various changes in the plans made by authority of the supervising architect. He states: “I instructed the contractors to suspend operations.” Suspension of the work by order of the supervising architect, whether upon an expressed or unexpressed opinion as to the necessity, could not, under the terms • of the contract, be questioned by Megrath & Duhamel, except in case of gross error or [480]*480fraud in making the same: Livesley v. Johnston, 45 Or. 30 (76 Pac. 946, 106 Am. St. Rep. 647, 65 L. R. A. 783); Kihlberg v. United States, 97 U. S. 398, 403 (24 L. Ed. 1106).

By the execution of the subcontract and the bond, the defendants became bound by the terms of the original contract, which so far as applicable were made a part of the subcontract, thereby making the same supplemental and subordinate to the general contract. In the absence of pleading and proof of fraud, gross mistake or negligence amounting to bad faith, the judgment of the supervising architect upon the question of suspension is final and will not be subjected to the revisory power of the court: United States v. Gleason, 175 U. S. 588, 602 (44 L. Ed. 284, 20 Sup. Ct. Rep. 228); Vanderhoof v. Shell, 42 Or. 578 (72 Pac. 126).

2. The opinion of the supervising architect was not required by the terms of the contract to be in writing. When the superintendent notified Megrath & Duhamel to suspend the work, they were bound to obey. Plaintiffs showed by the testimony of the architect, who was recognized as representing the government, that the work was suspended at different times. The defendant surety company objected and excepted to oral evidence of this fact for the reason that the letters authorizing such suspensions, being in Seattle, Washington, were not produced and were the best evidence. The suspensions of the work and the length of time of such cessations were facts resting in parol, which in the nature of things were not capable of being evidenced by any writing. No official or other record of such matters of detail are usually made. The letters would show more particularly the authority of the architect for the suspensions. The terms or phrases of the letters were not in dispute. The authority of the architect giving directions to Megrath & Duhamel [481]*481arose incidentally or collaterally. There was no real dispute in regard to the work actually having been suspended by authority of the architect. There was no prejudicial error in admitting’ the oral evidence: Wigmore, Ev., § 1246; Peay v. Salt Lake City, 11 Utah, 331 (40 Pac. 206); East v. Pace, 57 Ala. 521. Under the stipulations of the contract and the evidence as to suspensions and changes in the work necessitating a longer time for the performance thereof, the fact that the suspensions were had and the changes actually made and acquiesced in by those interested in the erection of the building rendered the question of any written authority for the same of but little importance.

3. The defendant surety company insists that the suspension of the work by the United States for more than a year was unreasonable and without authority, under the terms of the contract, and amounted in effect to the making of a new contract, thereby discharging the surety from all liability upon the bond; that in the meantime prices advanced 25 per cent. We do not think such a construction of the contract is warranted. The subcontract, in which the original one was incorporated and made a part thereof, provided (except as to the underground work): “All other work to be started upon notice from the parties of the second part and continued to completion with a sufficient force of men so as not to cause any delay in the progress of any other work on the building.” This provision as to time is very general, and it is only by a reference to the original contract that the time for performance can be more definitely ascertained. When Dwyer Plumbing & Heating Company made the contract with expectation of speculative profits, and the surety company for a compensation guaranteed the faithful performance thereof, the principal and surety should have [482]*482taken into consideration the possibility of gain or loss by increase or decrease in tbe price of materials. By tbeir contract they clearly assumed the responsibility for any loss that might be sustained in this respect, and they should not be relieved of their obligation.

4. It is not shown that plaintiffs were guilty of a breach of the contract. In order for the surety company to escape responsibility, it should appear that such company has been prejudiced by a breach of the contract. The breach must not have been merely technical, but a substantial one, working a pecuniary disadvantage to the surety company, or depriving it of some protection or' privilege reserved in the bond: James Black Masonry etc. Co. v. National Surety Co., 61 Wash.

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Bluebook (online)
133 P. 1180, 66 Or. 474, 1913 Ore. LEXIS 356, Counsel Stack Legal Research, https://law.counselstack.com/opinion/leiter-v-dwyer-plumbing-co-or-1913.