Court Opinion

ID: 9679119
Source: CourtListenerOpinion
Date Created: 2023-08-24 06:41:03.698223+00
Date Added: 2024-06-11T18:17:10.273999
License: Public Domain

Conley Bybd, Justice. In dissenting I wish to point out that the majority opinion mistakenly classifies the contract between Con-Ark and Maryland Casualty Co. as a conditional liability rather than an absolute liability. In so classifying the contract as a conditional liability it erroneously describes the contract liere involved as being similar to the one in Blair v. United States, 147 Fed. 2d 840 (8th Cir. 1945). The record here shows that Con-Ark had no contract with the Housing Authority. Con-Ark’s only contract was with Maryland Casualty Company. The majority opinion quotes a portion of the original contract between Con-Ark and Maryland with respect to payment, but since it omits what I consider an essential part of the contract I am setting forth the portion quoted in the original contract together with that succeeding1 portion omitted from paragraph no. 7 of the contract. “c. Within five (5) days after receipt by Maryland from the owner of any payment to it for extra work ordered, including but not limited to contemplated change in foundations, on or after the effective date of this AGREEMENT and performed by the Contractor, Maryland will make payment of an amount equal to the amount received by Maryland from the Oioner for the aforesaid extra work. “d. Within five (5) daj^s after the Owner notifies Maryland in writing that the Contract has been completed and accepted and the Owner has paid the final estimate and retained percentage to Maryland, then Maryland will pay to Contractor the balance due under this AGREEMENT, if any. It is distinctly understood and agreed by the parties hereto that the payments provided for hereunder are to be made only after Maryland receives from the Owner the estimate payments, payments for extras and changes, and retainages to be paid to Maryland by the Owner under the terms of the Contract between the Owner and Lewis. It is further understood and agreed that the payments shall, in no event, exceed the sum of $109,500.00, subject to any additions or deductions provided for hereunder. Any change or increase in the amount of this AGREEMENT hereinafter provided for shall he paid to the Contractor only in such amount as is allowed therefor by the Owner, anything in this AGREEMENT to the contrary notwithstanding. “It is understood that the payments provided for as above are to be made only after Maryland receives from the Owner the estimate payments, the payments for extras and changes, and retainages to be paid Maryland by the Owner under the terms of its Contract with Lewis, provided, hotoever, that should the Otvner withhold any estimate payment, payment for extras, or retainage for a period of twenty (20) days beyond the time it would normally be paid because of any reason not the fault of the Contractor, then Maryland shall nevertheless make payment to the Contractor for any such estimate, extra, or retainage earned: by the Contractor and without awaiting payment from the Otvner, as provided for in subparagraphs a, b, and c; provided further, however, that should the Owner withhold any payment herein referred to for a period of twenty (20) days beyond the time it would normally be paid, for reasons not the fault of the Contractor, then Maryland shall have the right to cancel this AGREEMENT upon notice to the Contractor. In the event of such cancellation, the Contractor shall be entitled to payment from Maryland for all amounts earned by the Contractor, including retainage under this AGREEMENT, up to the date of the cancellation. The testimony of Mr. Charles Nabholz was that the specification upon which the original contract was drawn made no provisions for any pilings to be placed as foundation for the structures to bo built on. He said that after they made the original agreement to complete the project, a new order came out to put in 1240 ft. of pilings and that they submitted to Maryland Casualty (to. the following bid: “Maryland Casualty Company c/o Edward Corring’ton 325 "Waldron Building Little Rock, Arkansas “Re: Grlenwood Ark Project 45-3 “"We propose to furnish labor and material to install concrete piles as per drawings by Stanley Brown sheets A-2, A-4, A-6, A-7 revised showing concrete piles for the sum of $6,500.00 to be added to our base bid of $109,500.00 on the above referred job. “This price is based on 124 piles 10’ deep. In event (hero is an overran the price will lie 4.75 per ft. In the event there is a underrun the credit will be at 4.00 per ft. ‘ ‘ R esp ectfullv submitted, “(¡liarles Nabholz, President Con-Ark Builders, Inc.” At page 168 of the record Mr. Nabholz testified as follows : “Q. You had authorization from Maryland for payment on overran in April of ’65, is that correct? “A. That’s right.” That the contract in Blair v. United States, 147 Fed. 2d 840 (8th Cir. 1945), is not similar to the contract here involved can readily be demonstrated by quoting the full paragraph from which the majority opinion takes a partial quote on page 3. The full paragraph in the Blair opinion is as follows: ‘ ‘ There is no evidence of any verbal contract by which Blair agreed to pay plaintiffs for extra expense incurred as a result of the “Speed-up Agreement.” The above quoted letter discloses not a promise by Blair to pay, but that additional compensation as approved by.the government would be granted where applicable. This implied a promise that Blair would turn over funds if and when realized by allowance and payment by the government. As such payment has not been received by him and no claim is made that he has not diligently attempted to make collection, and it affirmatively appears that lie has done so, defendant should not be held liable contrary to the terms of his agreement. Thomson v. Leak, 135 Cal. App. 534, 27 P. 2d 795; Wheat v. Platte City Ben. Assessment Special Road List., 227 Mo. App. 869, 59 S.W. 2d 88; Cowan v. Browne, 63 Mont. 82, 206 P. 432. We conclude that plaintiffs were not entitled to recover on account of the speedup agreement though they may be entitled to such recovery dependent upon whether or not defendant Blair received additional compensation from the government on account of the adjustment in the date of the completion of the work under his contract.” In 17 Am. Jur. 2d, Contracts, § 339, the promise to pay upon a specified event or condition is discussed as follows: “§ 339. Promise to pay upon specified event, condition, or contingency; payment out of particular fund. “Where an instrument purports to be payable upon the happening of a certain event, the question which must precede any inquiry as to the time of pay moni, assuming that the event has not happened, is whether the instrument imports an absolute liability. If the event is one that is CERTAIN to happen, the mere promise to pay may import such an absolute liability. If, however, the event is one WHOLLY or PARTIALLY within the promisor’s control and therefore not certain to happen, the absolute character of the liability cannot be inferred from the mere promise, but- must be sought in the other terms of the instrument or in .extrinic circumstances. Thus, the mere fact that the party promised to pay a certain amount when he sold a piece of land is not conclusive of the fact that there was an absolute liability. ‘ ‘ The real significance of the provision that the instrument is payable upon the happening of an event that is wholly or partially within the control of the promisor is apparent after it has been determined whether the debt is an absolute one. If the instrument, read in the light of the surrounding circumstances, shows that the debt is an absolute one, it is reasonable to suppose that the parties intended that a reasonable effort should be made to cause the event to happen within a reasonable time. Some courts declare broadly that where payment is to be made upon a condition under the control of the promisor, an action may be brought within a reasonable time. Moreover, where a debt is due and the happening of a future event is fixed on merely as a convenient time for payment, but the future event does not happen as contemplated, the law implies a promise to pay within a reasonable time. Thus, to an agreement to pay as soon as a crop can be sold or the money raised from any other source the law annexes as an incident that one or the other shall be done within a reasonable time and that the sum admitted to be due shall be paid accordingly. In such a case payment is not conditional to the extent of depending wholly and finally on the alternatives mentioned, but the stipulation merely secures to the debtor a reasonable amount of time within which to procure in one mode or another the means necessary to meet the liability. However, it appears to be the general rule that a promise to-pay out of a particular fund does not create an absolute liability, in the absence of facts or circumstances showing the contrary. Accordingly, where a contract requires payment from a particular fund, it cannot be said that the debt is payable in a reasonable time where the source fails without the fault of the promisor. Nevertheless, where the promise is to pay out of a fund to be realized in a certain way, there is an implied obligation to use reasonable diligence in performing the act upon which payment is contingent. In default of such diligence, payment becomes due without performance of the condition. - - “In some instances the money is made payable within a specified time after the happening of a certain event, such as the return of a specified vessel, which it is assumed will certainly occur. The fact that the vessel is lost at sea does not prevent the money from being payable within the time stipulated after the expiration of the period usually required for the return trip of the vessel. If a party puts it out of his power to cause the event to happen,• his liability accrues at once. “There is a difference between a promise to pay a debt on a certain condition, and a provision that the debt shall be payable only upon a certain condition, for the latter necessarily renders the debt itself conditional. Although a condition annexed to an express promise to pay a debt may render the promise to pay conditional without making the debt subject to the same condition,' a condition annexed to a promise to pay will commonly be construed to extend to the debt itself.” The complaint of Piling and Repairs was filed in the Circuit Court on Dec. 11,1965, the case was tried on Dec. 4,1967, and the judgment was filed on Jan. 2,1968. Thus, under the terms of the contract between Con-Ark and Maryland, it is obvious that the owner has withheld the payment of the extras in excess of twenty (20) days beyond the time it would normally be paid. For these reasons I contend that Maryland’s liability to Con-Ark is an absolute liability and that having performed the work in April of ’65, Con-Ark was certainly entitled to receive its pay in Jan. of ’68. In Maryland Casualty Company’s pleading on page 32 of the record it acknowledges that the additional work has been accepted by the Housing Authority. FURTHERMORE, I would affirm the judgment in tofo including the judgment against Stanley Brown and the Housing Authority. I would affirm the judgment against the Housing Authority because it has waived any errors with respect to the judgment against it by 'failing to file briefs here within the time allowed. The record at pages 166 and 167 shows that the bid price submitted to the Housing Authority for the additional work contained no provision for the overage and underage as was contained in Piling and Repairs contract. Based on this contract, the Housing Authority relied upon a provision in its contract that no contractual changes should be binding on the Housing Authority unless provided for in writing prior to making such changes. In its complaint, Maryland Casualty Co. in paragraph 3 pleaded as follows: ‘ ‘ Maryland Casualty Company denies that it is liable to Plaintiff or Third Party Plaintiff in any amount, but states that should it be found liable to Third Party Plaintiff in any amount for the cost of additional pilings in excess of 1,240 lineal feet or an amount in excess of $6,500.00, that it should have and recover such sum from Housing Authority of Pike County, Arkansas; Stanley Brown, Architect, and R. Y\T. Laird, jointly and severally.” Recognizing that there was a contention that. Stanley Brown did have authority to authorize the additional work, Maryland Casualty Co. pleads in paragraph 6 of the complaint as follows: “In the alternative, should Maryland Casualty Company be required to pay Third Party Plaintiff any sums in excess of $6,500.00 for said piling work and should it be determined that the Plousing Authority of Pike County, Arkansas is not liable to Maryland Casualty Company for such sums, Maryland Casualty Company should have and recover judgment over and against and be fully reimbursed and indemnified for such sums by Stanley Brown, Architect, and his agent, servant and employee, R. W. 1.aird, for reason that said work was performed under their specific instructions and directions, both oral and written, at a time and place when they had actual and apparent authority to authorize same, or held themselves out to have such authority. ’ ’ At the trial Stanley Brown, Architect, called the manager of his Little Rock Office, Mr. George Dowling, who testified that Laird, the man who authorized the extra piling, did not have the actual authority to authorize any excess drillings. He further stated that Laird had told him he did not take such authority. In addition to George Dowling, Stanley Brown called his structural engineer Ronnie Snowden, who testified that the extra piling work done was not called for by their plans and specifications and that from the standpoint of utility the extra piling added nothing to the buildings. My understanding of the law is set forth in Ormsby & Abraham Hite v. Kendall, 2 Ark. 338, 344 (1839), as follows: ! ‘... The principle is well settled, that if a person undertakes to contract as an agent for an individual or corporation, and contracts in a manner which is not legally binding upon his principal, he is personally responsible. White v. Skinner, 13 J. R. 307; Randall v. Van Vechten, 19 J. R. 60; Taft v. Brewster, 9 J. R. 334; Tippetts v. Walker, 4 Mass. R. 596; and Mott v. Hicks, 1 Cowen 536. The agent, when sued upon a contract, can only exonerate himself from responsibility "by showing his authority to bind those for whom he is undertaking to act. It is not for the plaintiff to show that he has not authority. The application of this principle to the case now under consideration clearly proves that Kendall'is personally responsible, and not the steamboat owners. He was bound to show that he had authority to contract for the steamer Teeumseh and owners, and tb ’prove this affirmatively, and in failing so to do, he becomes himself personally liable upon his undertaking"...” The architect, Stanley Brown, acting through his agent Laird, authorized the extra work resulting in this litigation. If I correctly read the Ormsby case, the architect became personally responsible unless he showed that he had authority to contract for the extra work and that the burden of proof was on him to do so. Not only did lie not do so here but he affirmatively stated that he had no such authority. Therefore I would affirm the judgment of Con-Ark against Maryland on the basis that it was an absolute liability which was due at the time of trial. I would also affirm Maryland Casualty Company’s judgment against the Housing Authority by virtue of the Housing Authority not having filed its brief within the time allowed by law. I would also affirm the judgment against the architect because he stated that his agent had no authority from the Housing Authority to authorize the extra work. I am at a loss to see how the architect could take one position in the trial court and a different position on appeal. For the reasons stated I respectfully dissent. George Bose Smith, J., joins in this dissent.