Teutonia Loan & Building Co. v. Bush

1 Teiss. 30, 1903 La. App. LEXIS 12
CourtLouisiana Court of Appeal
DecidedNovember 9, 1903
DocketNo. 3199
StatusPublished

This text of 1 Teiss. 30 (Teutonia Loan & Building Co. v. Bush) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Teutonia Loan & Building Co. v. Bush, 1 Teiss. 30, 1903 La. App. LEXIS 12 (La. Ct. App. 1903).

Opinion

MOORE, J.

The plaintiff corporation and Nelson Bush, one oi the defendants, covenanted, on the 16th day of March, 1901, in writing whereby the latter was to build a house for the former on a lot of ground by it owned and situated in the city of New Orleans. The contract was entered into' under the terms of Act 180 of 1894; the provisions whereof as to bond, registry, etc., were fully complied with. The contract stipulated, “ inter alia,” that the work was to be completed on or before May 1st, 1901, and that, if not so completed. Bush, the builder, was to pay a penalty for such failure at the rate of $2.00 per day for every day from the expiration of the time specified until the delivery of the building' and appurtenances; the same, to quote from the contract, “ to be deducted out of the last payment as liquidated damages.”

Bush defaulted on his contract and the consequence was that the plaintiff was compelled to finish the building. If the building had been completed by Bush, and by the 1st of May, tqoi, as stipulated, there would then have been due him by the plaintiff a balance of $564 [31]*31under the terms of the contract. As it was, the plaintiff completed the "house at a cost of $320.95, leaving a balance in the hands of the plaintiff of $228.45.' A-s is usual in such cases, those who had furnished the materials, etc., -to the builder were left unpaid. They at once caused their several accounts to be inscribed in the mortgage records of the parish of Orleans, expecting thereby to have their claims secured by a lien on the building.

Among the number left as unpaid creditors of Bush, and who had recorded their claim, was H. F. Lewis & Co.; their claim amounted to $142.45.

They brought suit against the plaintiff company, basing their right to recover, (notwithstanding the protection which the Act of 1894 supra gives to the owner,) on the ground, as alleged in their petition, “ that, after Bush defaulted on said building, %lr. Otto Walther, who was the expert and superintendent employed by said Teutonia Loan & Building Association, and who had full charge of the -erection and completion of said building, advised petitioner that, if petitioner would make certain changes, and alterations and corrections in their work, no reduction would be made as far as thei? bill was concerned, because of the default of said Bush, and guaranteed petitioner in behalf of the Teutonia Building Association that said Association would pay petitioner’s bill * * * * and that thereupon the alterations, corrections and changes were made.”

Thereafter the plaintiff corporation, having in its hands the balance of $228.45 aforesaid, an amount insufficient to discharge in full the unpaid claims, provoked a concursus, and, depositing in the registry said sum, prayed that the various claimants be cited and that they have their apportionment according to their respective claims, out of said sum, reserving and claiming however that :t should be first paid and recover by priority out of said fund the sum of $156.00 as demurrage under the contract, being $2.00 per day from and after May 1st, tgoi, the day the building should have been completed, to June Tytli, 1901, the day it was finally finished. H. F. Lewis & Company's suit was cumulated with the concursus proceeding, to stand as an opposition thereto.

The trial Judge denied the plaintiff the right of priority of payment out of the balance in its hands and subordinated it to the payment of the material men, and awarded judgment in favor of Lewis & Company for the full amount of their claim against the plaintifi company, less such sum as they may receive as their pro rata of the fund to be distributed.

From this Judgment the plaintiff appeals, the only parties contesting in this Court being the plaintiff and H, F. Lewis & Company.

[32]*32In our opinion our learned and esteemed brother of the District Court-erred in both propositions propounded by this controversy. So far as the right of the owner of the building to be entitled to priority in the payment of the demurrage due him is concerned, there ought to be no dispute, as jurisprudence has long settled this question affirmatively.

It was made the subject of review by us in H. S. Karstendick vs. George L’Hote Syndic et al, No. 2273 of our docket (decided Dec. 10th, 1900). In that case we affirmed the following propositions:

r. When a building contract stipulates for a penalty for delay, the owner may assert his claim for demurrage against any sum that may be due by him to the builder under the contract.

2. The owner’s claim may also be asserted in bar of the demand of furnishers of materials who have contracted with the builder and who have recorded and served attested accounts.

3. Those who contract with the builder undertake under and not beyond the contract, and have neither a right of action against the owner who has paid hnm according to law and the terms of the contract, nor a privilege on the buildings.

To these views we adhere. As we hold that the owner may first deduct the demurrage we must now determine the amount due therefor.

Our appreciation of the evidence leads us to the conclusion tint the plaintiff would be entitled to the entire amount of the demurrage claimed; but as its counsel stated from the bar of this Court, (and apparently with some arrangement with opposite counsel as to what amount should be allowed in the event that this particular question should be decided in the appellant’s favor) that he would waive all claims for demurrage beyond thirty-three days, and amounting to $65 wc will decree accordingly.

On the second branch of the case and which affects the judgment of Lewis & Co., it appears that the changes and. alterations which were made in the work done by that firm, were those which were absolutely necessary under the plans and specifications, without the doing of which they would have had no standing in Court, perhaps, even to claim their pro rata.

All the material which was to be furnished by them had been delivered and the changes made consisted oi replacing the blinds and some slats so as to comply with the plans and specifications. Besides this the sole and only evidence administered as going to establish, ns it contended, a distinct obligation on the part of plaintiff to pay Lewis & Company’s claim in full is the testimony of the head of that firm, 1 l. F. Lewis. Upon receipt of the following letter from the president of the plaintiff company, as follows :

[33]*33New Orleans June 20th, 1901.
Messrs H. E. Lewis & Co., LtcL,
216 Baronne street, City.
Gentlemen: — On or before to-morrow, 12 o’clock, kindly call at the office of our superintendent, Mr. O. Walther, corner Baronne and St. Joseph streets, in regard to your bill, on account of the Salcedo street cottage, with Nelson Bush, builder.
Yours truly,
CHARLES H. SCHENCK, President.
(“Dictated”).
he called upon Mr. Walther, the superintendent of the building, and then recites the following conversation with Walther.
Q. “Now, Mr.

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