Case ID: wis_155/html/0426-01.html
Source: Caselaw Access Project
Author: {"author": "ViNJE, J.\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Burroughs and others, Appellants, vs. Joint School District No. 2, Town of Richland and City of Richland Center, Respondent.
    
      December 11, 1913
    
    January 13, 1914.
    
    
      Contracts: Construction: “Value:” Proportional payments on building contract: Practical construction: Appeal: Disposition of cause: Talcing further evidence.
    
    
      1. The term “value” usually means market value, hut if such meaning, when applied to a particular contract or conditions growing out of it, leads to results clearly not contemplated by the contract, and it is susceptible of another meaning which harmonizes all the provisions of the contract, such other meaning should be given to it.
    2. In a building contract providing for payment in each month of “a sum equal to ninety per cent, of the value of the work done and material furnished during the preceding month, as assessed by the architects,” the word “value” is construed to mean, not market value, but contract value, i. e. the proportional value of the work and material, based upon the contract price.
    
      3. The fact that under such construction of the contract the owners had overpaid the contractors, does not show a practical construction of the contract, whére upon discovery of such overpayment further payments were refuse,d.
    4. A practical construction will not he deemed to have been given to a contract hy the parties in the absence of knowledge of the facts and circumstances to which that construction relates.
    5. In an action upon a building contract and 'for extras, where plaintiffs had ample opportunity at the trial to present evidence as to all their claims, and it was stipulated that affirmance on appeal of the judgment entered should end the litigation, the cause will not, upon such affirmance, be sent back for the taking of further evidence.
    Appeal from a judgment1 of tbe mrcuit court for Ricbland county: Geobge ClemeetsoN, Circuit Judge.
    
      Affirmed.
    
    Plaintiffs entered into a written contract1 witb defendant to build a school house for the agreed price of $44,467.28, exclusive of heating, plumbing, and ventilating, as per plans and specifications accompanying the contract. The specifications contained a provision that “once in each and every month during the progress of the work the owners shall pay to the contractor a sum equal to ninety (90 %) per cent, of the value of the work done and material furnished during the preceding month, as assessed by the architects, and the balance thirty days after the completion of the building according to this specification. Provided that for each of said payments the contractor shall obtain from the said architect's a certificate signed by them setting forth that the said payment is properly due.” After the work had progressed for some time and after the defendant had paid plaintiffs the sum of $28,948190, it refused to malee further payments on the ground that plaintiffs had been paid ninety per cent, of the portion constructed, based upon the contract price. The plaintiffs claimed that they had furnished labor and material of the value of $41,426.48 and that they were entitled to be paid ninety per cent, of such sum, and that by reason of the refusal of the defendant to pay such ninety per cent, they were compelled to abandon the contract. They sue for the difference between what' has been paid them and the value of the labor and material furnished by them as above stated, together with certain amounts claimed due on another cause of action, not' pertinent to any question raised by the appeal.
    The trial court found, upon practically undisputed evidence, that at the time plaintiffs abandoned the construction of the building it was only seventy per cent, completed, in value, and that the reasonable cost of completing it by the defendant was the sum of $14,702.80. It held as a conclusion of law “That the true construction of that part of the specifications relating to payments is that the value at any time of work done and material furnished must be determined upon a proportional basis — that is, it should be the value relative to and proportional to the contract price.” Judgment was awarded to the plaintiffs for the difference between the contract price and the sum of what the defendant had paid plaintiffs and the reasonable cost of completing the building, which difference amounted to $815.58. From such judgment' the plaintiffs appealed.
    
      J. H. Iiigbee and Levi H. Bancroft, for the appellants.
    For the respondent there was a brief by P. L. Lincoln and J ones •& Schubring, and oral argument by Mr. Lincoln and Mr. B. W. Jones.
    
   ViNJE, J.

The whole controversy turns upon whether the word “value” in the specification quoted in the statement of facts means market value or contract value. By contract value is meant the value of the material and work furnished based upon the contract price and not upon the market value of the same, if that differs from the contract value. When a building, whose component parts are determined in detail as to form, size, and material by exact' drawings and specifications, is agreed to be constructed for a specified sum, each component part bas a value proportional to and based upon the contract' price. Erom such plans and specifications and contract price' a supervising architect can determine with substantial accuracy the value of the work and material that have gone into the building at any stage of its erection. The trial court held that the contract value and not the market value of the work and material furnished each month was meant, and that since only seventy per cent, of the value of the building was completed by the plaintiffs, and they had been paid the sum of $28,948.90 on a contract price of $44,467.28, they had been paid ninety per cent, of the value of the material and work furnished by them. The plaintiffs claim they had furnished material and labor of the market value of $41,426.48 and that they were entitled to receive ninety per cent, of such sum.

Usually the term “value” means market value, and in the absence of circumstances showing that' another meaning shall be given it, such customary meaning will control. But if it be found that such meaning, when applied to a particular contract, or conditions growing out of it, leads to results clearly not contemplated by the contract' read as a whole, and it is susceptible of another meaning which harmonizes with all the provisions thereof, such other meaning must be held to have been within the contemplation of the parties when they entered into it.

If it be true, as plaintiffs claim, that the market value of the work and material was $41,426.48 in completing seventy per cent, of the value of the building which they agreed to build for $44,467.28, and that they were entitled to receive ninety per cent, of the market value of the work and material furnished each month, then they, at the same relative cost for the balance of the building, would be entitled to receive the whole contract price long before they completed it. That such was not the intention is clear from that part of the specification which reads, “and the balance thirty days after tbe completion of tbe building according to tbis specification.” It is a rule in tbe construction of a contract that, if possible, effect should be given to every part of it. Under plaintiffs’ construction and tbe conditions shown, tbis part of tbe contract with reference to tbe payment of tbe balance would be annulled. If seems clear from tbe whole contract that it was tbe intention of tbe parties to provide for tbe payment of ninety per cent, of tbe value of tbe work and material furnished each month based upon tbe contract price, and that tbe balance should stand as a guaranty of tbe faithful performance of the contract on tbe part of tbe plaintiffs till thirty days from it's completion. Such construction gives full force and effect to every part of tbe contract and leads to no absurd results. It enables tbe supervising architect who is to furnish tbe certificate, by an inspection of tbe work done and material furnished each month, to ascertain its proportional value based upon tbe contract price, without having to inform himself what tbe market value of each kind of material and labor is for such month. It gives tbe builder each month ninety per cent, of what be has put into tbe building measured by what be is to receive for it’ when completed, and leaves a guaranty of ten per cent, for faithful performance as contemplated by tbe contract'. Under such a construction it is immaterial whether tbe market value is above or below tbe contract value, as tbe builder each month receives bis pro rata amount. Under a contrary construction be might receive tbe full contract price before tbe completion of tbe building, or be might, if tbe market value was much less than tbe contract value, be compelled to forego receiving from fifteen per cent, to twenty per cent, or more of the contract price till after tbe expiration of thirty days from tbe completion of tbe building. In coming to tbis conclusion we have not overlooked the' cases of Howard Co. v. Baker, 119 Mo. 397, 24 S. W. 200, and Nat. S. Co. v. Long, 85 Ark. 158, 107 S. W. 384, bolding to tbe contrary. They seem to do so upon the sole ground that value means market value irrespective of context or o'f other provisions of the contract. Eor cases bearing upon the question in which it has been held that relative or contract value is meant under somewhat similar contract provisions, see Fidelity & D. Co. v. Agnew, 152 Fed. 955; Kelley v. Syracuse, 10 Misc. 306, 31 N. Y. Supp. 283; Hawkins v. Burrell, 69 App. Div. 462, 74 N. Y. Supp. 1003.

No practical construction of the contract binding upon the parties was given it by the fact that defendant overpaid plaintiffs. When such overpayments were discovered further payments were refused. • There can be no sound basis for a claim of practical construction in the absence of knowledge of the facts and circumstances to which the construction relates-

Plaintiffs contend the case should in any event be sent back for the taking of further evidence either by the court or a referee upon their claims for extras and upon the cost of completing the building by the defendant.. It appears, however, from the record that they-had ample opportunity to present such evidence upon the trial. Cases cannot be tried piecemeal. The circuit judge was justified in including in his findings of fact the statement, “Should the supreme court affirm the judgment entered upon these findings, it was further stipulated that that should end this litigation.”

A number of other questions are discussed in the briefs, but owing to the construction placed upon the contract they become immaterial.

By the Court. — Judgment affirmed.