Maryland Casualty Co. v. West Construction Co.

114 A. 890, 139 Md. 171, 1921 Md. LEXIS 145

• Court: Court of Appeals of Maryland
• Decided: June 28, 1921
• Status: Published

Opinion

Boyd, C. J.,

delivered the opinion of the Court.

The appellant was surety on the bond of Carl T. Opperman for the completion of certain construction work under a contract between him and the City of Harrisburg. Ho having made default in the performance of the contract, the appellee and the appellant entered into an agreement on the 27th day of September, 1913, by which the appellee agreed to perform any and all work remaining unfinished under the contract between Opperman and the said city. Suit was brought by the appellee against the appellant, for the recovery of $3,-485.88 withheld by the city as the retained percentage upon the work theretofore performed by Opperman. The lower court refused to grant a prayer recognizing the right of the plaintiff to recover that sum, and we concurred in its action. In. the course of the trial, which was before the court without a jury, two errors were discovered, one for $750 and another for $407.50, which were admitted by the casualty company and, although the court did not allow recovery for what was sued for — the retained percentage — a judgment was rendered in favor of the’ plaintiff for $1,307.25, being the sum of the two items above mentioned, together with interest on them.

The appellee (then plaintiff), not being satisfied with the amount of recovery, took an appeal to this Court, it being amongst the unreported cases in 132 Maryland, 699. The opinion in that case concluded by saying: “The judgment will be affirmed, no reversible error having occurred in any of the rulings at- the trial, but the affirmance will be without prejudice to any'claim which the plaintiff may 'be entitled to assert for work done under its agreement with the de1fendant on account of the deficiencies or imperfections in the prior work on the same project.” When the mandate was issued to the lower court it only recited that the judgment was affirmed with costs. A petition was then filed by the construction company, asking this Court to amend or modify its mandate so as to read: “Judgment affirmed, with costs, but without prejudice,” etc. — following' the language of the opinion we have just quoted. That was granted and the mandate was amended accordingly. A new suit was then brought —resulting’ in a judgment for $«,655.63, from which this appeal was taken.

The basis of this suit was the work of making good the deficiencies and imperfections in the prior work of Opperraan under his contract. The plaintiff filed six common counts and two special counts. The defendant filed the two general issue pleas, a plea of limitations and its fourth and fifth pleas, setting up the former judgment as a bar to this suit, and alleging that by virtue of an order of the Superior Court it had paid into court the sum of $1,284.23 in full satisfaction, release and discharge1 of said judgment, interest and costs. The plaintiff joined issue on the first and second' pleas, reversed the third (of limitations) and demurred to. the fourth and fifth. The demurrers to those two pleas were sustained, and afterwards an amended fifth plea was filed and a demurrer to it was sustained. Fourteen bills of exceptions to the rulings on evidence are in the record and the-fifteenth embraces the rulings in rejecting1 its nine prayers.

The appellant very earnestly contends that this Court had no power to authorize another suit to he brought on the contract, and that the judgment of affirmance was a bar to this-, suit, notwithstanding what was said in the opinion and the* modification made to the mandate. As that is the most important question involved in the appeal, not only as affecting this particular case, but the practice in this Court, we will first consider it. "We can have no doubt about the correctness of tlie general principles as announced in the many antherities cited by the appellant as to what constitutes res (idjudicata, that a party cannot generally split his cause of action, etc. For the most part they may be conceded, but do they reach the real point in this case.

It will be well for us to quote from the former opinion at ■ some length, especially as it was not reported. Judge ITrwer, in speaking for the Court, said:

“It is said that the appellant was required to remedy defects in portions of the work which the first contractor performed-, - and that this duty was assumed by the appellant under its agreement, and furnishes adequate support- for its theory that it is entitled, and was intended, to receive the amount of the retained percentage, of the cost of the previously finished work over and above the price agneed upon for the work then remaining uncompleted. In reference to ■this suggestion it is to be observed that the agreement- between the appellant and the casualty company provided specifically for payment on the unit price basis therein designated for fti-h of the work for which ■ the appellant contracted, and upon .¡that: ¡basis alone, therefore, must its compensation be ascertained. The appellant’s undertaking was to perform the work leftumeompleted by Oppennan in accordance with the specifications of the contract he had executed. That description of - the work yet to be done clearly included sucli operations as might be necessary to supply deficiencies-in the construction-previously attempted and to complete it as required by the specifications. The work defectively done hv the preceding contractor1 was unfinished work within the terms of the -appellant’s agreement. For such work the appellant was undoubtedly entitled to be paid, but only at the unit price rate of ■ compensation, which the contract defines as applicable to every feature of the work for which it makes provision.

“The evidence in the record docs not show the items or contract value of the labor and materials furnished by the appellant- in supplying deficiencies in the prior construction. It is stated generally in the testimony that the appellant was required to do such supplemental work and thereby incurred considerable expense. No allowance for work of that nature appears to have been made in the accounting' between the casualty company and the appellant, their settlement, however, being expressly without prejudice to the rights of the parties to assert their respective theories in reference to the question now under consideration. The contention- of the casualty company, in substance, is that, under the agreement, all the work required to complete the project according to specifications, including the correction of defects in the preceding work, was to be done by the appellant for the amount which the casualty company was to receive from the city, plus the difference between that amount and the price,-on the new contractual basis, of the work which the first contractor had left wholly unperformed. Neither this view, nor that of the appellant, already indicated, is in accord with our interpretation of the contract bv which the rights of the parties are to be determined. In our opinion the correct meaning of the agreement is that the appellant should' be paid at the specified unit prices for all work required to complete the project conformably to- the specifications of the original contract, both as to the portion of the construction not previously begun and as to that which had been undertaken but left in an imperfect condition.”

As there was sufficient in the record to indicate that the plaintiff', under a proper construction of the contract, might be entitled to recover for such deficiencies and imperfections, as it could prove, and had not been allowed, it seemed to us to be just and proper to do- what we did, and we affirmed the judgment without prejudice to the plaintiff asserting its claim for them. That was peculiarly proper as the West Construction Company bad, on August 12th, 1915, in acknowledging receipt, of a check, written to- the casualty company":

“ft is hereby mutually understood that the acceptance of this check shall be without prejudice to the rights of either party to assert further claims in the final settlement under the contract by the terms'of which1 said work was dono. This is the Understanding had between your Messrs. R. E. Proctor and Walter Clark at your office on the morning of August 11th, 1915.”

And that was substantially agreed to by letter of same date.

When the suit was brought it was, as we have seen, for the retained percentage — the theory apparently being that as that was retained from Opperman out of the estimates allowed him for work done, and as there were deficiencies and imperfections in that work which the construction company had corrected, it was entitled to recover the amount so retained, which had been paid over to the casualty company. As we agi'eed with the lower court that that was not correct, hut also agreed that 'the plaintiff was entitled to recover for the two items spoken of, and found no error in the rulings of the court, we affirmed the judgment, but in' doing so stated what is quoted above. There is no doubt that we intended that our affirmance of the judgment should not preclude the plaintiff from asserting its claim for such work. The petition to have the mandate amended was served on the counsel for the casualty company on April 19, and our order was not passed until May 3, 1918. Mo objection was filed to the petition, and no motion for modification of the judgment or opinion was made. The question then would seem to he whether we had the power to hind the lower court by such a decision and, if we had, then it must stand, unless we have the right to now .disturb it, and determine it is proper to do so.

.Section 22 of Article 5 provides that:

“In all cases where judgments shall be reversed or .•affirmed by the Court of Appeals, and it shall appear to the court that a new trial ought to be had, such new trial shall be awarded and a certified copy of the opinion and judgment of the Court, of Appeals shall be transmitted forthwith to the court from which the appeal was taken, to the end that said canse may be again tried as if it had never been tried,” etc.

There could have been no serious question about the power of the Court, under that section, to award a new trial not withstanding it affirmed the judgment, if it appeared to the Court that a new trial ought to be had. The statute says so, and while we have usually confined the exercise of that power to cases which had been disposed of on the pleadings, we cannot concede that we do not have the power to do so. The concluding line quoted above from the statute "would have the life taken out of it, if it he construed to mean that there could never be a new trial awarded by this Court under such circumstances as now confront us. It says that it may be. again tried — that is, after it has been once tried — and not only that, hut “as if it had never been tried.” It is expressly made to apply whether the judgment- is reversed or affirmed, and there is not the least suggestion that if -the merits of the controversy were in any way involved in the first trial, it, never could be tried again. The statute now in the Code is broader than it originally was". The object of the Legislature was to g'et rid of the manifest injustice so often done under the old practice, as the result of technicalities, the enforcement of which might sometimes seem to intelligent laymen as well as* lawyers to he regarded as of more importance than seeing that justice was done. In Kennerly, Executrix, v. Wilson, 2 Md. 245, the Court sustained the right of the executrix to recover, but affirmed a judgment in favor of the defendant, on the ground that the declaration did not aver damages to the executrix, but the Court ordered a procedendo. Judge Masojt said: “It is true no case has been cited where the power "has been exercised by the late Court of Appeals in a case like the one now before ns, and even cases have been referred to where similar applications have boon refused by that Court. But it by no means follows from these two circumstances that no such power has been vested in this court.” Earnshaw v. Sun Mutual Aid Soc., 68 Md. 465, was a suit on a certificate of membership in that society. The lower court held that the action was barred by limitations, and also excluded the certificate as evidence, on the ground of variance between it and and the con tract sued on. This Court held that the action was not barred, but agreed with the lower court in excluding the certificate which would have authorized an affirmance of the judgment, and the opinion concluded: “But conceding this to be so, and that the judgment ought to be affirmed; still, we think it a clear case where a new trial ought to be had notwithstanding the affirmance, and to that end we should use the power vested in this Court by the Code, art. 5, sec. 16 (now 22), Kennerly v. Wilson, 2 Md. 245. It is immaterial to the parties therefore whether we affirm and remand, or reverse and remand, and we adopt the latter course.”

ISToi more striking illustration of the result of technicalities could be furnished than by the case of Farmers’ Bank v Bowie, 4 Md. 290. There the judgment was in favor of the defendant because the notice of protest was insufficient, and the Court refused a procedendo, although in the case of Graham v. Sangston, 1 Md. 59, where, as stated in 4 Md. 294, the notice was identically the same, a procedendo was ordered. * Crinen' Judge Be Grand, who delivered the opinion in both cases, said: “This case is not like'that of Graham, v Sangston; there the judgment was reversed on the appeal of the plaintiff, whilst here it is affirmed on his appeal.” It may be remarked in passing that the case of Graham v. Sangston was not reversed on the appeal of the plaintiff, but. on the appeal of the defendant, and if the action of the Court was based on such distinction, it was based on an error of fact, but, conceding that to be immaterial, it will be seen that the refusal to grant the procedendo was based on the construction of the Act of 1830, Chapter 186, which concluded with a provision “that nothing herein contained shall be construed to authorize the return of any transcript in any caxise where the judgment of the Court of Appeals would be a bar to a new action brought upon the same cause.” “The same cause” in that, case was the endorsement on the note — “the pleading would show the cause of action to be the same in both cases,” as said in that opinion. But whether or not there could he a distinction between such case and this, whore the suit is based on the same contract as the former one, but the judgment there was giren for -wholly different items from those in this case, we need not discuss, for the important thing for our consideration is the fact that the present statute no longer has any such proviso' as the Act of 1830 had. In the Codes of 1860 and 1888, both of which made many material changes in the original acts, that proviso was omitted, as it was in the Codes of 1904 and 1912, and in the late rules adopted by us. When the former acts wore codified in the Code of 1860, and the same language has since' been used, the omission of that provision in the Act of 1830 is significant. The broad language1 of section 22 of article 5, is that "in all cases where judgment shall be reversed or affirmed by the Court of Appeals, and it shall appear lo the Comí (hat a neir trial ought to he had, such new trial shall he awarded,” etc.

In Parker v. Sedwick, 4 Gill, 318, there was an action of debt on a judgment recovered on an administrator’s bond in Virginia, but a deposition offered by tlio plaintiff was excluded on the ground that the defendant did not have proper notice of taking the testimony. A judgment was rendered for the defendant, and the plaintiff appealed. Our predecessors affirmed the judgment, but for a different reason from that given by the lower court in excluding the deposition. A procedendo ánd a new trial were awarded under the Act of 18:50. although the appellee contended that there was no merit in the plaintiff’s claim. Beall v. Beall, 7 Gill, 233, was an action of ejectment. A prayer offered by the plaintiff’s was rejected by a divided court, a judgment was entered for tlie defendant, and the plaintiff appealed. Our predecessors held that the prayer was properly rejected and affirmed the judgment, “hut as it does not appear to this Court that the substantial nurit' of this ease are determined by the judgment,” tlu case will he remanded with procedendo under the Act of 1830. In State v. Belt. & O. R. R. Co., 48 Md. 49. there was an action of debt to recover taxes, and a judgment for the defendant was entered, from which the State appealed. This Court held that there was error in sustaining exceptions to certain interrogatories which the plaintiff filed —being in the nature of a bill of discovery, but it was there said, “It is plain, however, that the State was entitled to recover in this suit, and even were we obliged to affirm the judgment below, we should have remanded the case for a new trial under section 16 (now 22), article 5 of the Code.”

There are many cases where the judgment below was rendered on a demurrer and affirmed bjr this Court, but remanded so that after the necessary amendments- they could be tried upon their merits, most of them being cited in the notes to section 22 of article 5 of the Annotated Code. In Milske v. Steiner Mantel Co., 103 Md. 235, the lower court sustained demurrers to the several counts of the declaration, and the plaintiff refused to amend. Judge Burke after stating that we found no error in sustaining the- demurrers, and entering judgment for the defendant, said on page 251: “But if the facts set out in the record be true, the plaintiff has substantial grounds of action against the defendant, and it would be a reproach to the administration of justice if he were denied the right to have his case heard upon its merits, merely because of errors in the pleading, or mistake of judgment in the pleader in not making the proper amendments. In order to avoid such injustice, if is provided by article 5, section 22, Code 1904, as follows:” — then setting out the language of the section. He quoted from Creaper v Hooper, 83 Md. 504: “This Court is.- vested with the discretionary power when in its judgment the ends of justice will be promoted, to remand a cause to the lower court for trial upon its merits.” See also Tyng & Co. v. Woodward, 121 Md. 422, 439.

The appellant relied very much on what was said in Archer v. State, 74 Md. 410, 432, in passing on the motion made to remand the cause for a new trial. The opinion in tliat case did in some places speak as if it was” a question of power in the Court, and did refuse to remand the case because the State had made a mistake in claiming that the first bond was only liable for defalcations up to November 18th, 1889, instead of to the end of the second term of .Mr. Archer. That case differed from this in several important particulars. In the first place the judgment had been affirmed, before the motion was made, and it was in the nature-of a motion for a new trial. -Then in Archer’s case the defendants had taken an appeal, and the judgment had been affirmed in favor of the plaintiff, which had also' taken an appeal on the rejection of proffered testimony, hut Judge Bryax said that, “the State’s appeal from the ruling had no connection with the merits of the motion.” There was also another suit against the sureties on the second bond, which had been decided in favor of the defendants, as Mr.. Archer had no authority at that time to enter into a. bond. The defendants were sureties on the bond, and the Court was dealing with the rights of sureties who may have been, and probably were, prejudiced by the neglect of the State-in not seeing that the treasurer-elect had qualified under his second appointment within the time required by the Constitution. 'Judge Bbyay concluded by saying that when “the-sureties executed their official bond, they had a most just and reasonable expectation that their liability would not extend beyond the period of two years, with the addition of the short time allowed by law for the qualification of a successor. Circumstances, which are well known, continued their liability for two years longer and this occurred without any default on their part. The law operated against them with great severity, but it was enforced. On the present-occasion it operates to protect them, and it will likewise be enforced now.” It may be said that the appellant’s connection with this matter was as surety, but not so far as the West Construction Company was concerned. The casualty company's liability to the construction company was as prin cipal, under the contract made between them, and if it is required to pay this claim or any part of it, it is only because it employed the construction company to do this work for it. We might show other distinctions between the two cases, but that, is really not material. If the Court had the power to do what it did do in this case, as we think it undoubtedly had, it was in the exercise of what appeared to it to be the right thing to do-, and even if it Avas mistaken in that, it would not he just to the other parties to the contract to now disturb its judgment.

We Iuia^c thus far considered the question, and that, too-, at great length, as if the- judgment of this court had simply been "judgment affirmed, and a new trial awarded,” or something near the language of section 22 of article 5, but it could do the appellant no possible harm to- have a new suit, instead of merely a new trial of the original one. AYe did not say in terms that a now suit could be brought, but only that the affirmance should he without prejudice to any claim which the plaintiff may be entitled to assert for the work specifically referred to. If the defendant had any objection, to the allowance of the two sums included in the former judgment, or either of them, it might have made- some difference, but it did not complain of that judgment at the former trial, and in its brief in this case says that it admitted that the sum of $1,301.25 was due the plaintiff, for which judgment Avas entered. It would, be pressing technicalities to an unwarranted extent to say that this Court had the power, as it undoubtedly had, to affirm and award a new trial for the purpose of allowing the plaintiff to assert its claim in reference to the deficiencies and imperfections, hut did not have the power to do so in the way it did, which was equivalent to saying that the plaintiff should not be barred by the affirmance.

The only case outside of this State which the appellant cited, supposed to bear directly upon the question in this case, was that of Prondzinski v. Garbutt, reported in 86 N. W. 969 (10 N. D. 300). Apparently it was intended to refer to the same case in 83 N. W. 23 (9 N. D. 243), and in the latter ease, the Supreme Court of North Dakota explained the former one in a wav which shows that it could not affect this one. Without stopping' to discuss them, in 4 C. J. 1112, 1113, 1147 and 1148 many cases are cited, some of them as to the effect of an appellate court affirming without prejudice. We are of the opinion that the lower court was right in sustaining’ the demurrer to the fourth, fifth, and amended fifth pleas, and in its rulings on the thirteenth and fourteenth bills of exception.

In the conn act between the West Construction Company and the casualty company, the former does “agree to perform any and all work now remaining unfinished under said contract between Opperman and the City of Harrisburg,” but it is distinctly provided “that the party of the first part will perfoi m the work to he done: upon the following’ unit prices,” they being then set out. The consideration for the agreement Avas the payment “of the balance of the unpaid portion of the contract price1 now remaining in the hands of the City of Harrisburg, "either due or hereafter becoming due and * * * the difference between the payments to he made, by the City of UarrisLuig, based upon the unit price contracted for hv said Opperman, and the unit prices agreed to by the party of the first part.” There is no provision in the contract for the payment, or the performance of any work, except upon the unit prices. Before» if. was entered into Mr. West, the president of the construction company, after getting the drawings and some preliminary information, visited the resident engineer a,t .Harrisburg, Mr. Justin, went over the general details of the work with him in his office and they then went out on the work. He said they went to the lower end, walked over the entire stretch of it, a little more1 than three miles, and Mr. Justin called his attention “to various conditions of the work, various features of the Avork as 1o what Opperman had done, some tilings he had been paid for and not entirely finished.” Justin called liis atention to the 24-foot section, which had been partly completed and the side walls up, other'parts simply liad the wooden forms, the side walls, and they had not been poured. Tie said that Ur. Justin pointed out various details, including defective blocks, some of the embankments, and lie observed that the place was filled with mud, old Bed springs, rubbish of all kinds, which Mr. Justin said would have to be removed and cleaned out, and repairs tee the slabs would have to bo made; that some of them were out of alignment, warped out of place, some were broken and marked with rain, and there were other deficiencies and imperfections pointed out to him for some of which he is now seeking to recover. After the inspection that he made with Mr. Justin, Mr. West went back to Baltimore and submitted his proposal to the casualty company. It is therefore clear that the construction company had every opportunity to see, and did see what could be seen, and that Mr. Justin called Mr. West’s attention to most of the things they are charging for now beyond the unit prices. - The officers of the company knew, or must be presumed to have known, of the troubles they would have to contend with, but there is nothing whatever in the agreement they entered into providing for payment of anything that would not be included in the unit prices mentioned in the contract. They knew as well before the contract was entered into as they did afterwards, that mud and debris would have to be contended with and removed, that slabs which were broken and out of alignment would have to be replaced, and presumably they fixed their prices accordingly. They knew also how their compensation was to be paid, as we have set out above. The fact is, the construction company did not claim that it- was to be paid for all such work as they are now claiming — or at least to such an amount, but their claim was that the company was to be paid the amount of retained percentage which was held back from Oppexman, and contended that it was to have that in addition to what the casualty company received from the city and was to pay them the difference between the unit prices in the two con tracts. When the other ease was before us tlie Court said: ‘‘The work defectively done by the preceding contractor was unfinished work within the terms of the appellant’s agreement. Eor such work the appellant was undoubtedly entitled to be paid, but only ai the unit price fate of compensation which the contract defines as applicable to every feature of the work for ichich it makes provision”

It co-uld scarcely be imagined that the officers of two companies such as the appellant and the appellee, would deliberately make a contract of this character and leave out such tilings as they knew would have to bo done — especially when those things had just been brought to their attention, even if they might have had no reason before to assume that there would be more or less to do in correcting what Opperman had defectively done. It is not surprising that the construction company had no such idea when it brought the first suit, although it did believe that it was to be compensated by the retained percentage, which, in passing it may be said, amounted to about one-third less than the judgment it has recovered in this case.

If, as it was argued, a number of the items in, the bill of particulars were not included in the unit price, and hence were extras not provided for in the contract, the appellee would have the statute of limitations to- contend with, klany, if not most of those things, would have been required to be done in an early part of the work, and if they arc not covered by the contract, and could be recovered as extras, if not barred., there is nothing in the contract to postpone payment of them until fifteen days after the whole job was completed, as the appellee contends, in discussing the statute of limitations, was the time for payment under the contract.

Without going through all the exceptions at. length, one by one, we will refer to the bill of particulars, for convenience. Tlie item as to cutting out the condemned blocks, those for completing the intercepter, including the pay for the engineer. night fireman, boiler hire, pump hire and coal cannot be allowed; that for excavating mud should only have been 85 cents a cubic yard, instead of $1.50; clearing out the mud from 360 feet of pipe and all Hie items under 3 must be rejected. The next item (4) seems to be the same unit charge as in the contract. There were, therefore, errors in the first, second, third, fourth and fifth exceptions. We can see no reason for the objection to the question in the sixth nor in the seventh exception. We find no error in the eighth, and the ninth is not material. We see no error in the tenth, eleventh or twelfth. What was in there was really helpful to the appellant, under the view we take of the case. From what we have already said, it will be seen that we find no error in the thirteenth and fourteenth.

The defendant’s first prayer was properly rejected. Several reasons might be given, but it is sufficient to say it entirely disregards the time of payment. There was some evidence in the case applicable to the common counts, although at least some of it was improperly admitted, but the prayer was properly rejected by reason of what we said as to unit prices. The third and fourth were also- properly rejected. There was some evidence as to the sloping and grading of the embankment, the work on which was charged for a.t the unit price. Without saying more, what we have just said as to sloping and grading embankments being* included in the fifth, it was properly rejected, as it was not proper to consider that item. As we have said, the items named in the sixth prayer ought not to have been allowed; it is not necessary to say more on that- prayer. The seventh was properly rejected. The eighth ignored the time of payment and was also properly rejected. The ninth ought to have been granted.

It follows that the judgment must be reversed.

Judgment reversed and new trial awarded, the appellee to pay the costs.