Court Opinion

ID: 7278060
Source: CourtListenerOpinion
Date Created: 2022-07-25 20:02:35.550605+00
Date Added: 2024-06-11T16:18:57.070739
License: Public Domain

. Mr. Chief Justice Shepard
delivered the opinion of the Court:
1. The contract was entered into for a lawful purpose and is one that each party was competent to make. It is unlike the ordinary building contract, but its meaning is not difficult of ascertainment.
The object of the contract Avas that the owner should not be compelled to pay more than the actual cost of the building, plus the fixed profit of the contractor of $60,000. To protect the owner from an excessive cost, the guaranteed maximum of its payment was fixed at $850,000. Under but one condition could the OAvner be made to pay more than this guaranteed maximum amount; which was that, in case of completion before the date fixed therefor, for each day thereof it should be increased $5. If, however, the actual cost of the building, plus the profit, $60,000, should be less than the guaranteed maximum amount, the foregoing addition to the maximum amount should not benefit the contractor. On the other hand, it was stipulated that should the contractor fail to complete the building by the date fixed, the OAvner “shall have the right to deduct from the guaranteed maximum amount the sum of $100 for each and every day that the completion is delayed beyond the said date.” In the ordinary building contract with liquidated damages covenant, the owner agrees to pay a fixed sum to the contractor, regardless of the actual cost, or whether there will be profit or *464loss; the contractor agrees to complete and deliver possession on a .day named; and aware that the owner may sustain loss through default in completion, he stipulates for a certain sum per day in liquidation of the owner’s damages.
By the terms of the present contract actual cost of construction and a reasonable profit thereon were contemplated. IJnder no circumstances could the contractor receive more than the actual cost of the construction, plus its profit of $60,000. Had it completed the building on the day named at the actual cost of $850,000, it could have received no profit; and for every day that completion was delayed thereafter the owner could deduct $100, thus causing the contractor an actual loss of $26,000. So, if the building had actually cost $790,000, the contractor would be entitled to his profit also, subject to diminution, however, to the extent of $100 per day for every day of delay. There can be no doubt what this guaranteed maximum amount was, and of its controlling effect upon the so-called liquidated damage stipulation. It is agreed that the actual cost of the completed building was $681,000; adding to this the stipulated profit of $60,000, the aggregate is $711,000. Deducting from the guaranteed maximum amount the stipulated amount for the delay, namely, $26,000, the whole amount of the payment was $83,000, less the guaranteed maximum amount. This sum of $711,000 the contractor was entitled to receive notwithstanding the delay. That the contract might, under certain conditions of cost, have permitted the contractor, without loss to itself, to delay the completion, to the loss of the owner, and therefore have been an unwise one for the owner to enter into, cannot affect its construction. It was competent to contract; no imposition was practised upon it to induce its execution; and it must abide by its terms. There was no error in sustaining the defendant’s demurrer to the first two counts.
2. Plaintiff’s declaration, while founded upon the contract sets up two substantially independent grounds of recovery. In counts 1 and 2 the claim of damages is founded upon the covenant of the contract stipulating the damages for delay in construction. The third count, reciting the promised date of com*465pletion, alleges and claims damages for the breach thereof independently of the aforesaid covenant. The contract is an entirety and governs the relations, rights, and liabilities of the owner and the contractor. The consequences of delay in construction after the date fixed for completion were expressly provided for therein, and excluded any other measure of damages. As no damages could be recovered under the provisions of the contract, none can be recovered independently of it. The demurrer to the third count should have been sustained.
The order appealed from in No. 2545, sustaining the demurrer to the first and second counts, is affirmed. The order appealed from in No. 2544, overruling the demurrer to the third count, is reversed. Costs are to be taxed against the Southern Building Corporation in both appeals, considered as one cause.