Case Title: Pillsbury v. Blumenthal

Citation: 272 P.2d 326, 58 N.M. 422

Docket Number: 

State: new-mexico

Court: New Mexico Supreme Court

Date: 1954-06-17T00:00:00Z

Document:
272 P.2d 326 (1954) 58 N.M. 422 PILLSBURY et al. v. BLUMENTHAL et al. No. 5756. Supreme Court of New Mexico. June 17, 1954. Rehearing Denied July 13, 1954. *327 Merritt W. Oldaker, Roy F. Miller, Jr., Albuquerque, for appellants. Allen M. Tonkin, John E. Hall, Joseph T. Cole, Jr., Albuquerque, for appellees. COMPTON, Justice. Appellees, plaintiffs below, instituted this action for damages for breach of contract. The complaint charges that appellants failed to properly complete the construction of a residence according to the terms of the contract. Issue was joined by general denial and the following special defenses were asserted: (a) the complaint failed to state a claim upon which relief could be granted; (b) that arbitration was a condition precedent to any right of action; (c) acceptance of the work by appellees constituted a waiver; and (d) appellees' failure to mitigate the damages. From an adverse judgment, appellants are here asserting error. The trial court made the following findings: The court concluded that appellees had been damaged in the amount of $1,500 and entered judgment accordingly. It is first argued that a demand to arbitrate and the filing of notice thereof with the architect and contractors is a condition precedent to the bringing of the action. The contract provides that the contractors should furnish a performance bond which was done by appellant, United States Fidelity and Guaranty Company. The terms of the bonds furnished by it provide that unless the building contract is executed upon The Standard Documents of The American Institute of Architects, all disputes, claims and questions arising under the contract shall be subject to arbitration in accordance with the provision of article 40 of the general conditions of the contract for the construction of buildings contained in the Fifth Edition of such Standard Documents. Article 40, referred to, in part reads: The authorities are in accord that parties may agree to make arbitration a condition precedent to suit, McCoy and Dunlavy v. Torrance County Sav. Bank, 19 N.M. 422, 144 P. 283, but the burden in this instance was upon appellants to establish such affirmative defense by showing a *329 complete and enforceable arbitration agreement. Perhaps the Standard Form of The American Institute of Architects makes adequate provisions for arbitration; however, it was not offered in evidence nor considered by the trial court. In such case it cannot be considered on appeal. It is asserted the court erred in denying the motion to dismiss the complaint for failure to state a claim upon which relief can be granted. In a determination of this question the complaint must be construed in a light most favorable to appellees and with all doubts resolved in favor of its sufficiency. Michelet v. Cole, 20 N.M. 357, 149 P. 310; State ex rel. Burg v. City of Albuquerque, 31 N.M. 576, 249 P. 242; In re Trigg, 46 N.M. 96, 121 P.2d 152; In re Morrow's Will, 41 N.M. 723, 73 P.2d 1360; Parker v. Beasley, 40 N.M. 68, 54 P.2d 687; Leimer v. State Mutual Life Assurance Co., 8 Cir., 108 F.2d 302. While the complaint may be subject to criticism but as against a motion to dismiss, it is sufficient. It alleges the contractors failed to properly complete the work, a violation of the rights of appellees, damages resulting therefrom and a demand for relief. Had appellants entertained any misgivings as to the claim asserted, motion to make more definite and certain was available to them. In Michelet v. Cole [20 N.M. 357, 149 P. 312], supra, we held: The sufficiency of the pleading was sustained in State ex rel. Burg v. City of Albuquerque, supra [31 N.M. 576, 249 P. 247], in the following language: It is further argued that acceptance of the work by the owners bars any subsequent action for breach of the contract. It is generally held that acceptance by the owner of work done under the construction contract constitutes a waiver of subsequent actions against the contractor or his bond for breach of the contract but this rule has its exception where defects are latent and are not reasonably discoverable by inspection. When appellees accepted the work and took possession there were no apparent defects, except minor defects deemed unimportant by them; but the defects complained of both in workmanship and material were hidden and became apparent subsequently. These defects are reflected by the testimony of the witness Burk, an architect, who testified: The alleged failure of appellees to mitigate the damages is assigned as error. In this respect it is the duty of a party to use reasonable diligence to mitigate damages about to be suffered from a breach of contract. Appellants do not point out how the damages could have been mitigated. Nevertheless, they do say that had appellees patched the cracks with plaster, additional cracks might have been prevented. This is pure speculation and such speculative, uncertain and contingent possibilities cannot be taken into consideration in mitigation of damages. In response to a question by the court the witness Ellis responded: Other points are urged for a reversal but these challenge the sufficiency of the evidence to support the finding and it would serve no beneficial purpose to discuss the facts further. However, from our examination of an 800 page record, we are satisfied the findings are substantially supported. The judgment should be affirmed, and it is so ordered. McGHEE, C.J., and LUJAN and SEYMOUR, JJ., concur. SADLER, J., absent from the state, did not participate.