Case ID: app-dc_3/html/0170-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Chief Justice Alvey", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

CARVER v. HALL.
    Contracts; Offer and Acceptance; Set-off in Equity.
    1. If a person to whom an offer is made, does not accept it in the terms in which it is made, hut seeks to incorporate some new qualification or condition with the acceptance, the party making: the offer is not bound by such qualified or conditional acceptance. The acceptance must be made of the proposal as made.
    2. An acceptance, however, is not made conditional by an addition or qualification which is wholly immaterial, nor by the existence of a misunderstanding between the parties as to the construction of any mere collateral terms not part of the agreement itself.
    3. But where a party accepts an offer he must not adopt the proposed terms, and yet even slightly vary them, without calling the attention of the party making the offer to the fact of the variation.
    4. In a suit in equity against a contractor to enforce a me- • chanics’ lien for materials furnished, a recoupment or set-off cannot be allowed as against the claim of the complainant, of one-half of a penalty or forfeiture incurred and paid by the defendant to the owner of the building by reason of his failure to complete the building within the time prescribed by his contract with the owner, when the complainant was not privy to such contract.
    No. 141.
    Submitted January 3, 1894.
    Decided April 6, 1894.
    Hearing on an appeal by one of two defendants from a decree of the Supreme Court of the District of Columbia, holding an equity term, in a suit to enforce a mechanics’ lien.
    
      Affirmed in part and reversed in part.
    
    The Court in its opinion stated the case as follows:
    The bill in this case was filed by the appellees Hall & Garrison to enforce a mechanics’ lien against a building known as the annex or addition to the Shoreham Hotel in this city, and the piece of ground upon which the same was erected. The Hon. Levi P. Morton, the owner, and Frank N. Carver the builder, were made defendants.
    
      The lien was taken under the act of Congress of July 2, 1884, Ch. 143, relating to the District of Columbia, by the appellees for a balance alleged to be due them for materials furnished for the building, under a subcontract with the defendant Carver, the principal contractor and builder.
    The act of Congress provides that every building erected or repaired by the owner or his agent in the District of Columbia, and the lot or lots of ground of the owner upon which the same is being erected or repaired, shall be subject to a lien in favor of the contractor, subcontractor, material man, etc., respectively, for the payment for work or materials contracted for or furnished for or about the erection, construction or repairing of any such building, etc.; and it is further provided that the proceedings to enforce the lien created by the act shall be by bill' in equity, and that all persons interested in the premises, so far as known, shall be made parties to such proceedings.
    There is no question made as to the regularity of the proceedings to effect the lien. The question is as to the amount due, if anything, to the appellees, on what is alleged as the contract with them for work and materials furnished in and about the erection of the building. The actual controversy is between the appellees and Carver the builder, and not as between the appellees and Morton the owner; the latter simply occupying the position of stakeholder.
    The appellees are material men, operating factories in Philadelphia, with offices of business in the latter place and New York, and the defendant Carver is a builder and contractor in the city of Washington, and as such he contracted to erect the annex to the hotel known as the Shoreham in this city. The contract for the erection of the building required the contractor Carver to complete the building by. December 1, 1890, under a forfeiture or penalty of $200 a day for each day’s delay beyond that period. The defendant Carver contracted with the appellees for furnishing all the interior wood finish (floors excepted) necessary to complete the building, and the contract was made in the form of letters of proposal and acceptance. And, as one of the principal questions of the case turns upon the proper construction of these letters, we cite them in full. The letter of the ap-pellees, by their agent H. C. Adams, which is the letter of proposal, is dated May 20, 1890, and is addressed to the defendant Carver in these terms:
    “Dear Sir: We will furnish the interior woodwork finish (floors excepted) necessary to complete the Shoreham Annex, in Washington. All hard-wood work to be filled and stained as required, and all pine work to be primed. This includes window sash and frames, also forty-one (41) wood mantels, as per designs furnished by the architects; these mantels to be polished and plated, ánd all of the above delivered free on board car in Washington for the sum of ninety-five hundred and twenty-five ($9,525) dollars. This covers all material as called for on the corrected plans. All to be furnished as required, and none of it in more than four weeks after measurements can be obtained. You to give us all sizes as early as possible.
    “ Yours truly,
    “ Henry C. Adams,
    “ Manager."
    In response to this letter, the defendant, by letter of the 21st of May, 1890, wrote in terms as follows:
    “ Henry C. Adams, Esq.,'
    “Dear Sir: Your proposition of the 20th inst., for furnishing mill work, mantels, etc., as per plans and specifications of Hubert, Pirsson & Hoddick for the Shoreham Annex building, to be built in Washington, this day received, and the proposition accepted.
    “ You; must waive the four weeks clause in regard to window frames for basement and first story, and you will be kind enough to get the sizes of these from the architects, as I have not yet received the corrected ones to enable them to be sent from here. You will be kind enough to attend to the matter and let me have the basement and first story as quick as you can make and ship them.
    “ I have the estimates from Boughton & Terwilliger and Mr. Bunn which you kindly sent, and they will be considered and communicated with at the earliest possible moment.
    “Yours, &c.,
    “Frank N. Carver,
    “PerH. B.”
    It is shown that, under the contract, thus made, the ap-pellees furnished all the interior wood work, except the flooring, and some mantels that were taken from the adjoining building and used in the annex, and for the non-supply of which credit was allowed on the contract with the appel-lees. Various payments were made by the defendant on the contract for the materials furnished by the appellees; and, according to the statement by the latter of the account between the parties, it stood thus:
    Contract price.$9,525 00
    Cash paid.$6,500 00
    Work not furnished. 958 25
    Damaged material. 63 66
    - 7,52i 91
    Balance due.$2,003 09
    It was for this balance, thus shown to be due the appellees, that the decree below was passed fixing a lien upon the property and ordering it to be sold in default of payment of the amount decreed to be due.
    But the defendant Carver insists that there is error in this; and that, instead of there being a balance due the appellees, there is in reality a balance due him, the defendant, and it is for the correction of such error that this appeal is taken.
    1st. He insists that by the correct construction of the contract, the appellees were required to do the polishing of the hard wood furnished for the building, and that, by reason of the failure to do that finishing work before sending the material to Washington, he was compelled to have it done here, at a cost of $1,562.08, for which amount he claims credit on the contract price.
    2d. He also claims that he is entitled to a larger credit than was given him by the appellees for material not furnished; and that, instead of $958.25, the amount of credit in this respect given by the appellees, he is entitled to a much larger amount, and that, upon a proper statement of the account, it would stand thus:
    Contract price.$9,525 00
    Cash paid.$6,500 00
    Work and material not furnished. 1,429 00
    Work damaged. 63 66
    Amount paid for finishing work. 1,562 08
    - 9,554 74
    Thus showing a balance due Carver of.$29 74
    In addition to this, the defendant Carver claims that by reason of failure of the appellees to furnish the material in due time, he incurred the forfeiture or penalty of $200 per day for thirty days, and that as he was required to allow to the owner $3,000 for failure to complete the building according to contract time, he is therefore entitled to be indemnified by the appellees to the extent at least of one-half this amount, say $1,500. Thus showing that, instead of the defendant being indebted to the appellees, the latter are indebted to the defendant in the sum of $1,529.74.
    
      Mr. Henry Wise Garnett and Mr. H. P. Blair for the appellant.
    
      Mr. Robert W. McPherson and Mr. Irving Williamson for the appellees.
   Mr. Chief Justice Alvey

delivered the opinion of the Court:

1. The first question is, whether by the terms of the contract, the appellees were required to do the polishing of the hard wood work before delivering it to the defendant in Washington.

In the letter of the appellees to the defendant, the proposition is made to furnish the interior wood work finish necessary to complete the Shoreham Annex. All hard wood work to be filled and stained as required, and all pine work to be primed. This to include window sash and frames; also forty-one wood mantels as per designs furnished by the architects; these mantels to be polished and plated, and all the above to be delivered free on board of car in Washington, &c. As to the mantels furnished, there is no question in respect to their finish. They were, by the express terms of the contract, required to be polished and plated, and they were so finished. But with respect to the other material furnished, did this proposal of the appellees contemplate the polishing of the work by them before delivery to the defendant? The polishing, it seems, was no inconsiderable part of the work to be done in order to a complete finish. It added largely to the value of the material, according to the claim of the defendant; and being so important a matter, if it was in fact in the contemplation of the parties, it ought to have been and would most likely have been expressly provided for, as was done in respect to filling and staining — items of work of less importance than polishing.

It is difficult, if not impossible, to say, upon any fair principle of construction, that it was contemplated by the proposal of the appellees that the latter should do all the polishing of the hard wood furnished before delivery, other than the mantels. If it did so contemplate, why was it not expressed? Why deem it necessary or proper to express the requirement as to the mantels, and not as to the rest of the work? As if to exclude the possibility of misunderstanding, the writer of the letter appears to have been careful to particularize the work to be done in the way of finish, and he says expressly that the hard wood work was to be filled and stained as required, and all pine work to be primed; but not .a word about polishing. Now, certainly, if polishing had been part of the finish proposed, it would have been expressed. Moreover, there seems to have been strong reason for deferring the work of polishing until the material arrived in Washington; as in the handling and transportation of the polished material there would have been great risk and danger of having it seriously defaced and damaged.

It is contended, however, that the letter of the defendant, in response to the proposal of the appellees, did not accept the proposal in the sense and with the meaning that the polishing of the materials, other than the mantels, was not included; that the letter-of acceptance contemplated the polishing of all the hard wood work before delivery to the defendant in Washington. This contention is based upon the terms of the letter of acceptance, which declares: “Your proposition of the 20th inst. for furnishing mill work, mantels, etc., as per plans and specifications of Hubert, Pirsson & Hoddick, for the Shoreham Annex, this day received, and the proposition accepted.” What meaning was intended to be expressed by the terms, “ as per plans and specifications,” may admit of some doubt; but this reference to the plans .and specifications may have been in regard to the quantity, ■or nature and character of the material, and not to the special manner of its finish at the mill. It was incumbent upon the defendant to be plain and explicit, if he sought in any manner to vary the substance of the original proposal upon which he was called to act. The principle is settled upon authority as •it is in reason, that if the party to whom the offer is made does not accept it in the terms in which it is made, but seeks •to incorporate some new qualification or condition with the .acceptance, the party making the offer is not, of course, bound by such qualified or conditional acceptance. The acceptance must-be of the proposal as made. An acceptance, 'however, is not made conditional by an addition or qualifi- ■ cation which is wholly immaterial, nor by the existence of a -.misunderstanding between the parties as to the construction of any mere collateral terms not part of the agreement itself. But. where a party accepts an offer, he must not adopt the proposed terms, and yet even slightly vary them, without calling the attention of the party making the offer to the fact of the variation. This is the principle laid down in the case cited on behalf of the appellees in Proprietors of English and Foreign Credit Co. v. Arduin, L. R. 5 H. L., 64. Of that case it was said by the Court of Chancery Appeals in the case of Harris (7 Ch. App., 587, 593), that the facts were such as persons might differ about, and the Exchequer Chamber had held one way, while the House of Lords held another. But the principle upon which both proceeded was, “ that where there is an acceptance of an offer, if there is to be a term or condition imposed, it must be clearly so stated, otherwise it is to be considered simply as a notification which may have such effect as it ought to have in a court of law.”

In this case, we think the offer did not embrace the polishing of any of the materials to be furnished, except the mantels, about the finish of which there is no question; and there is nothing in the letter of acceptance, when read in connection with the letter of proposal to which it was a response, that justifies the conclusion that any modification or enlargement of the terms of the proposal was intended. At any rate, no such modification or enlargement of the terms proposed is expressed.

2. As to the claim of the defendant Carver for additional amount of credit to that actually allowed for work and materials not furnished or required, because of changes in the plan of the building, we are of opinion that the defendant has not received a sufficient credit in that behalf. The ap-pellees allowed and deducted from the contract price, for work and materials not furnished, the sum of $958.25. The defendant, in his answer, swears that the work not furnished, including certain mantels claimed to be worth $265, was worth, at the rate or price for which the appellees contracted to furnish the wood work to the defendant, the sum of $1,492.66. The defendant is, to a large extent, supported in this claim by the witness Norwood, who made an estimate of the work not furnished, other than the mantels, and his estimate of the value of such work was $1,164; but this, of course, included the polishing of the work. For that finish a reasonable deduction should have been made; for, as we have seen, the appellees were not bound by their contract to furnish the material- with that finish. Upon the evidence, we think, instead of a deduction for work not furnished of the sum of $1,492.66, claimed by the defendant, that a deduction from the contract price in that behalf of $1,265 will be just and reasonable; and that the decree should be modified in this respect.

3. The third ground of objection to the decree below we think cannot be sustained. It is insisted that there should be a recoupment or set-off allowed, as against the claim of the appellees, to the extent of $1,500, being the one-half of the amount of the penalty or forfeiture incurred and paid by the defendant, by reason of his failure to complete the building under his contract within the time prescribed. The ap-pellees were not privy to the contract of the defendant with the owner for the erection of the building. And though it is claimed by the defendant that it was by reason of the delay of the appellees in furnishing and delivering the material under their contract that the forfeiture was incurred (a fact, however, denied by the appellees), yet the appellees were no parties “to the settlement and allowance of $3,000 as forfeiture,” as between the defendant and the owner of the building; and, consequently, the appellees ’ were in no manner bound by that adjustment and allowance. If they committed a breach of their contract with the defendant they were liable therefor, it is true, but the damages were wholly unliquidated, and it was the right of the appellees to have the questions arising upon the alleged breach of contract tried in a court of law and passed upon by a jury. It is not within the province of a court of equity to undertake to determine such questions; and the parties interested in having them determined must resort to a court of law for their adjudication. The mere existence of cross demands will not be sufficient to justify a set-off in equity. A set-off is ordinarily allowed in equity only when the party seeking the benefit of it can show some equitable ground for being protected against his adversary’s demand; and the mere existence of cross demands does not create such an equity. Hence, where the application in equity was for an account of transactions under a contract, and there was an action at law for damages for the breach of it, it was held that there was no right of set-off in equity. The object and the subject-matter, said the Chancellor, being totally distinct, the fact that the agreement had been the origin of both did not form any such bond of unity, as to furnish an equitable ground for restraining the action at law, and bringing to a court of equity the jurisdiction to determine the question of damages for the breach of contract. Rawson v. Samuel, 1 Cr. & Ph., 161, 178, 180; Glennie v. Imrie; 3 Y. & C., 440.

Chancellor Kent has laid down the correct doctrine upon this subject in the well known case of Murray v. Toland, 3 John. Ch., 575, where he said: “ If this settlement was not in the way, yet the claims of one of the plaintiffs would not be a proper subject of set-off, for they are founded upon che alleged negligence and misconduct of M., and these are matters of tort, sounding in unliquidated damages. Such misconduct is properly to be inquired into, in a distinct suit for that purpose; and so it was decided in Winchester v. Hackley, 2 Cranch, 342. It is also a subject of legal and not of equitable jurisdiction.” The same principle was held and followed in the case of Smith v. Washington Gaslight Co., 31 Md., 12, where many of the authorities are reviewed.

It follows from what we have said that the decree appealed from must be affirmed in part and reversed in part, and instead of a decree for $2,003.09, the amount of the decree below, this court will enter a decree for $1,696.34, in favor of the appellees. The costs to be paid in equal proportions— the one-half by the appellant Carver and the other half by the appellees.

Decree affirmed in fart and reversed in fart.