Maryland Casualty Co. v. West Construction Co.

Boyd, C. J., delivered the opinion of the Court. The appellant was surety on the bond of Carl T. Opperman for the completion of certain construction work under a contract between him and the City of Harrisburg. Ho having made default in the performance of the contract, the appellee and the appellant entered into an agreement on the 27th day of September, 1913, by which the appellee agreed to perform any and all work remaining unfinished under the contract between Opperman and the said city. Suit was brought by the appellee against the appellant, for the recovery of $3,-485.88 withheld by the city as the retained percentage upon the work theretofore performed by Opperman.

The lower court refused to grant a prayer recognizing the right of the plaintiff to recover that sum, and we concurred in its action. In. the course of the trial, which was before the court without a jury, two errors were discovered, one for $750 and another for $407.50, which were admitted by the casualty company and, although the court did not allow recovery for what was sued for — the retained percentage — a judgment was rendered in favor of the’ plaintiff for $1,307.25, being the sum of the two items above mentioned, together with interest on them. The appellee (then plaintiff), not being satisfied with the amount of recovery, took an appeal to this Court, it being amongst the unreported cases in 132 Maryland, 699 . The opinion in that case concluded by saying: “The judgment will be affirmed, no reversible error having occurred in any of the rulings at- the trial, but the affirmance will be without prejudice to any'claim which the plaintiff may 'be entitled to assert for work done under its agreement with the de1fendant on account of the deficiencies or imperfections in the ¹⁷³ prior work on the same project.” When the mandate was issued to the lower court it only recited that the judgment was affirmed with costs.

A petition was then filed by the construction company, asking this Court to amend or modify its mandate so as to read: “Judgment affirmed, with costs, but without prejudice,” etc. — following' the language of the opinion we have just quoted. That was granted and the mandate was amended accordingly. A new suit was then brought —resulting’ in a judgment for $«,655.63, from which this appeal was taken. The basis of this suit was the work of making good the deficiencies and imperfections in the prior work of Opperraan under his contract.

The plaintiff filed six common counts and two special counts. The defendant filed the two general issue pleas, a plea of limitations and its fourth and fifth pleas, setting up the former judgment as a bar to this suit, and alleging that by virtue of an order of the Superior Court it had paid into court the sum of $1,284.23 in full satisfaction, release and discharge1 of said judgment, interest and costs. The plaintiff joined issue on the first and second' pleas, reversed the third (of limitations) and demurred to. the fourth and fifth. The demurrers to those two pleas were sustained, and afterwards an amended fifth plea was filed and a demurrer to it was sustained.

Fourteen bills of exceptions to the rulings on evidence are in the record and the-fifteenth embraces the rulings in rejecting1 its nine prayers. The appellant very earnestly contends that this Court had no power to authorize another suit to he brought on the contract, and that the judgment of affirmance was a bar to this-, suit, notwithstanding what was said in the opinion and the* modification made to the mandate. As that is the most important question involved in the appeal, not only as affecting this particular case, but the practice in this Court, we will first consider it. "We can have no doubt about the correctness of tlie general principles as announced in the many antherities cited by the appellant as to what constitutes res ¹⁷⁴ (idjudicata, that a party cannot generally split his cause of action, etc. For the most part they may be conceded, but do they reach the real point in this case.

It will be well for us to quote from the former opinion at ■ some length, especially as it was not reported. Judge ITrwer, in speaking for the Court, said: “It is said that the appellant was required to remedy defects in portions of the work which the first contractor performed-, - and that this duty was assumed by the appellant under its agreement, and furnishes adequate support- for its theory that it is entitled, and was intended, to receive the amount of the retained percentage, of the cost of the previously finished work over and above the price agneed upon for the work then remaining uncompleted. In reference to ■this suggestion it is to be observed that the agreement- between the appellant and the casualty company provided specifically for payment on the unit price basis therein designated for fti-h of the work for which ■ the appellant contracted, and upon .¡that: ¡basis alone, therefore, must its compensation be ascertained. The appellant’s undertaking was to perform the work leftumeompleted by Oppennan in accordance with the specifications of the contract he had executed.

That description of - the work yet to be done clearly included sucli operations as might be necessary to supply deficiencies-in the construction-previously attempted and to complete it as required by the specifications. The work defectively done hv the preceding contractor1 was unfinished work within the terms of the -appellant’s agreement. For such work the appellant was undoubtedly entitled to be paid, but only at the unit price rate of ■ compensation, which the contract defines as applicable to every feature of the work for which it makes provision. “The evidence in the record docs not show the items or contract value of the labor and materials furnished by the appellant- in supplying deficiencies in the prior construction. It is stated generally in the testimony that the appellant was required to do such supplemental work and thereby incurred ¹⁷⁵ considerable expense.

No allowance for work of that nature appears to have been made in the accounting' between the casualty company and the appellant, their settlement, however, being expressly without prejudice to the rights of the parties to assert their respective theories in reference to the question now under consideration. The contention- of the casualty company, in substance, is that, under the agreement, all the work required to complete the project according to specifications, including the correction of defects in the preceding work, was to be done by the appellant for the amount which the casualty company was to receive from the city, plus the difference between that amount and the price,-on the new contractual basis, of the work which the first contractor had left wholly unperformed. Neither this view, nor that of the appellant, already indicated, is in accord with our interpretation of the contract bv which the rights of the parties are to be determined. In our opinion the correct meaning of the agreement is that the appellant should' be paid at the specified unit prices for all work required to complete the project conformably to- the specifications of the original contract, both as to the portion of the construction not previously begun and as to that which had been undertaken but left in an imperfect condition.” As there was sufficient in the record to indicate that the plaintiff', under a proper construction of the contract, might be entitled to recover for such deficiencies and imperfections, as it could prove, and had not been allowed, it seemed to us to be just and proper to do- what we did, and we affirmed the judgment without prejudice to the plaintiff asserting its claim for them.

That was peculiarly proper as the West Construction Company bad, on August 12th, 1915, in acknowledging receipt, of a check, written to- the casualty company": “ft is hereby mutually understood that the acceptance of this check shall be without prejudice to the rights of either party to assert further claims in the final settlement under the contract by the terms'of which1 said work was dono. This is the Understanding had ¹⁷⁶ between your Messrs. R. E. Proctor and Walter Clark at your office on the morning of August 11th, 1915.” And that was substantially agreed to by letter of same date. When the suit was brought it was, as we have seen, for the retained percentage — the theory apparently being that as that was retained from Opperman out of the estimates allowed him for work done, and as there were deficiencies and imperfections in that work which the construction company had corrected, it was entitled to recover the amount so retained, which had been paid over to the casualty company.

As we agi'eed with the lower court that that was not correct, hut also agreed that 'the plaintiff was entitled to recover for the two items spoken of, and found no error in the rulings of the court, we affirmed the judgment, but in' doing so stated what is quoted above. There is no doubt that we intended that our affirmance of the judgment should not preclude the plaintiff from asserting its claim for such work. The petition to have the mandate amended was served on the counsel for the casualty company on April 19, and our order was not passed until May 3, 1918. Mo objection was filed to the petition, and no motion for modification of the judgment or opinion was made.

The question then would seem to he whether we had the power to hind the lower court by such a decision and, if we had, then it must stand, unless we have the right to now .disturb it, and determine it is proper to do so. .Section 22 of Article 5 provides that: “In all cases where judgments shall be reversed or .•affirmed by the Court of Appeals, and it shall appear to the court that a new trial ought to be had, such new trial shall be awarded and a certified copy of the opinion and judgment of the Court, of Appeals shall be transmitted forthwith to the court from which the appeal was taken, to the end that said canse may be again tried as if it had never been tried,” etc. There could have been no serious question about the power of the Court, under that section, to award a new trial not ¹⁷⁷ withstanding it affirmed the judgment, if it appeared to the Court that a new trial ought to be had. The statute says so, and while we have usually confined the exercise of that power to cases which had been disposed of on the pleadings, we cannot concede that we do not have the power to do so. The concluding line quoted above from the statute "would have the life taken out of it, if it he construed to mean that there could never be a new trial awarded by this Court under such circumstances as now confront us. It says that it may be. again tried — that is, after it has been once tried — and not only that, hut “as if it had never been tried.” It is expressly made to apply whether the judgment- is reversed or affirmed, and there is not the least suggestion that if -the merits of the controversy were in any way involved in the first trial, it, never could be tried again.

The statute now in the Code is broader than it originally was". The object of the Legislature was to g'et rid of the manifest injustice so often done under the old practice, as the result of technicalities, the enforcement of which might sometimes seem to intelligent laymen as well as* lawyers to he regarded as of more importance than seeing that justice was done. In Kennerly, Executrix, v. Wilson, 2 Md. 245 , the Court sustained the right of the executrix to recover, but affirmed a judgment in favor of the defendant, on the ground that the declaration did not aver damages to the executrix, but the Court ordered a procedendo. Judge Masojt said: “It is true no case has been cited where the power "has been exercised by the late Court of Appeals in a case like the one now before ns, and even cases have been referred to where similar applications have boon refused by that Court.

But it by no means follows from these two circumstances that no such power has been vested in this court.” Earnshaw v. Sun Mutual Aid Soc., 68 Md. 465 , was a suit on a certificate of membership in that society. The lower court held that the action was barred by limitations, and also excluded the certificate as evidence, on the ground of variance between it and and the con ¹⁷⁸ tract sued on. This Court held that the action was not barred, but agreed with the lower court in excluding the certificate which would have authorized an affirmance of the judgment, and the opinion concluded: “But conceding this to be so, and that the judgment ought to be affirmed; still, we think it a clear case where a new trial ought to be had notwithstanding the affirmance, and to that end we should use the power vested in this Court by the Code, art. 5, sec. 16 (now 22), Kennerly v. Wilson, 2 Md. 245 . It is immaterial to the parties therefore whether we affirm and remand, or reverse and remand, and we adopt the latter course.” ISToi more striking illustration of the result of technicalities could be furnished than by the case of Farmers’ Bank v Bowie, 4 Md. 290 .

There the judgment was in favor of the defendant because the notice of protest was insufficient, and the Court refused a procedendo, although in the case of Graham v. Sangston, 1 Md. 59 , where, as stated in 4 Md. 294 , the notice was identically the same, a procedendo was ordered. * Crinen' Judge Be Grand, who delivered the opinion in both cases, said: “This case is not like'that of Graham, v Sangston; there the judgment was reversed on the appeal of the plaintiff, whilst here it is affirmed on his appeal.” It may be remarked in passing that the case of Graham v. Sangston was not reversed on the appeal of the plaintiff, but. on the appeal of the defendant, and if the action of the Court was based on such distinction, it was based on an error of fact, but, conceding that to be immaterial, it will be seen that the refusal to grant the procedendo was based on the construction of the Act of 1830, Chapter 186, which concluded with a provision “that nothing herein contained shall be construed to authorize the return of any transcript in any caxise where the judgment of the Court of Appeals would be a bar to a new action brought upon the same cause.” “The same cause” in that, case was the endorsement on the note — “the pleading would show the cause of action to be the same in both cases,” as said in that opinion. But whether or not ¹⁷⁹ there could he a distinction between such case and this, whore the suit is based on the same contract as the former one, but the judgment there was giren for -wholly different items from those in this case, we need not discuss, for the important thing for our consideration is the fact that the present statute no longer has any such proviso' as the Act of 1830 had. In the Codes of 1860 and 1888, both of which made many material changes in the original acts, that proviso was omitted, as it was in the Codes of 1904 and 1912, and in the late rules adopted by us. When the former acts wore codified in the Code of 1860, and the same language has since' been used, the omission of that provision in the Act of 1830 is significant.

The broad language1 of section 22 of article 5, is that "in all cases where judgment shall be reversed or affirmed by the Court of Appeals, and it shall appear lo the Comí (hat a neir trial ought to he had, such new trial shall he awarded,” etc. In Parker v. Sedwick, 4 Gill, 318 , there was an action of debt on a judgment recovered on an administrator’s bond