Parker v. Tilghman v. Morgan, Inc.

Parke, J., delivered the opinion of the Court. Sumner A. Parker and Dudrea A. Parker, his wife, entered into a contract on January 27th, 1932, with the corporation called Tilghman V. Morgan, Inc., to furnish all the materials and perform all the work called for in certain plans 'and specifications for the erection of a stone dwelling house, with a garage attached, on a tract of land in Baltimore County which was owned by the husband and wife. The materials and labor were to be paid for in cash as the work progressed, and the final payment was to be made thirty days after substantial completion of the work. The contractor began work before the month ended and maintains that it had fully performed, with some agreed changes and alterations in the plans and specifications, the contract by January 26th, 1933, but that, although demand has been made, only a part of the contract price has been paid by the owners.

Within ¹³ six months after the performance of the work and of the furnishing of the material, the contractor filed in the office of the clerk of the Circuit Court for Baltimore County its claim as a lien on the house, its location, and so much other adjacent ground of the owners as might be necessary for the ordinary and useful purposes of the building. The amount charged to be due is $8,749.30, with interest from January 27th, 1933, less some credits to be allowed on account of payments whose amounts were unknown to the contractor, but which were made by the owners to sub-contractors and materialmen. The amount stated embraces claims of the E. J. Mueller Furnace Company and Robert S. Green, Inc., subcontractors and materialmen, which have also filed mechanics’ liens against the property. The Johns Hopkins Hospital acquired a mortgage lien on the land in question on November 3rd, 1932, which was after the contractor had begun the performance of its contract.

These statements are an abridgment of the allegations of a bill of complaint filed by the contractor against the owners, their mortgagee, and the two other corporations which have filed mechanics’ liens as stated. The bill of complaint is to recover the amount of the contractor’s mechanics’ lien by a sale, so that the proceeds may be apportioned among the persons entitled to liens according to their respective rights. Code, art. 63, sec. 25. The claim of the furnace company is $1,879.14, with interest from December 7th, 1932, and that of Robert S. Green, Inc., is for cement, sand, fire brick, flues, tiles and other materials, and the amount due is $2,248.15.

The answer of the owners was a denial of any indebtedness to the contractor or subcontractors. With respect to the contractor the defense set up is that it did not perform all the work nor furnish all the materials as it had agreed, but, although requested, had refused performance, and that the owners had, in fact, paid to the contractor a large sum in excess of what it was entitled to receive; and that, because of the damage done to the property of the owners by reason of the negligent and faulty work of the ¹⁴ contractor, it had become liable in damages to the owners in a large sum of money in excess of any rightful demand of the contractor. The owners, also, denied the accuracy of the account in respect of the materials and work furnished, and the prices to be paid, and demanded strict proof of every item of the account. The answer of the owners to the claim of the L. J. Mueller Furnace Company is in denial of the obligation on the ground that the contract of the owners with the principal contractor was that the last named should install a certain.system which consisted of a furnace, “climator,” equipment, and appurtenances, and the heating ducts throughout the house; and that the contractor sublet a portion of this work to a subcontractor, who, in turn, sublet the installation of a furnace, climator, and appurtenances to the Mueller Furnace Company, but that, while the equipment had been placed in position for the service intended, it had been so negligently designed and constructed that it had failed to heat the building as had been agreed, but that additional equipment was shortly to be installed, and, until it had been, it would be impossible to determine whether or not the system would supply the premises with heat as had been agreed.

The owners further averred that they were already engaged in a litigation on the equity side of the Circuit Court for Baltimore County with the furnace company in reference to the enforcement of this alleged lien, and that the answer of the owners had been filed. The answer of the furnace company to the bill at bar is of the same effect as to this particular allegation, and on February 12th, 1935, the two causes were consolidated as of September 24th, 1934. The owners denied, in the cause now pending, that Robert S. Green, Inc., had secured a mechanics’ lien, on the ground that this corporation was a subcontractor, and did not notify the owners of its intention to claim a lien within sixty days after furnishing or delivering the last materials necessary or proper for their building under the terms of the contract. The answer, also, set out the ¹⁵ payments made, and the credits to which the owners claim they are entitled.

On the same day that the defendants filed their answer they brought a cross-bill against the contractor. The bill proceeds upon the theory that on January 27th, 1932, the parties had agreed, subject to later changes and modifications, in respect of the erection of a dwelling house and garage by the contractor for the owners, and that one of the terms of the contract was that the work should substantially be completed by July 1st, 1932, provided that the owners did not delay the contractor by not supplying the materials which were to be furnished by the owners, but that, without any default on the part of the owners, the contractor did not complete the undertaking by the time agreed, and had not fully performed its contract when the cross-bill was filed, but that the owners, notwithstanding the incomplete condition of the dwelling house, had moved into the same about November 15th, 1932, and had there remained, without an acceptance. The cross-bill of complaint shows that a large sum of money had been paid by the owners to the contractor, but alleged that they were not bound to make the final payment until the contractor had fully performed the contract, and that the contractor was to be responsible for faulty materials or workmanship and was to remedy any defects and respond for damages to other work that might result therefrom and should appear within a period of one year from the date of substantial completion. It was further charged that the contractor had agreed to be responsible to the owners for any damages which might be sustained because of its negligence or of that of any one employed by it.

The cross-bill then avers that the contractor, without any fault on the part of the owners, had been guilty of many breaches. The building had not been substantially completed, although the time for this had elapsed. There were faults of construction, negligence in work, defects in material and disregard of plan and specifications. These and other breaches of the contract were set forth at ¹⁶ length, and their consequences were asserted to be a great loss in damages because of the large expenditures necessary to be made by the owners to complete the building as had been agreed by the contractor, and because of the structural injury caused to the building and to the paintings, furniture, and other personal property of the owners which had been moved into the building.

The sum of these damages is charged to be greatly in excess of what the contractor would have been entitled to receive if it had performed the contract as agreed, so that, if credit be given the contractor for all work properly done, the contractor would, the owners claim, still be in debt to the owners in the sum of $20,000 for the net damages sustained by the owners. The relief asked is that the suit of the contractor to enforce its mechanics’ lien be dismissed, and that a decree in personam, be granted the owners against the contractor in the amount of $20,000, or in such other amount as the court may find would be due the owners by reason of the default of the contractor, and that the owners might have general relief. The contractor demurred to the cross-bill on the ground that it is so vague, indefinite, and general in its allegations that a more certain and specific bill is required for the defendant to answer. The chancellor overruled the demurrer, and the contractor answered.

The contractor’s defense is that there was some delay in the completion of its contract because of a failure on the part of the owners to make timely delivery of materials which they had undertaken to supply, and that the owners were either responsible for the delay or had waived it. The answer alleged that the building was substantially.) completed as agreed in November, 1932, when the owners accepted it, and that some minor alterations and adjustments were later made by the contractor. The contractor further makes a categorical denial of the charges that the buildings were not built in full compliance with the plans and specifications; and that the work was negligently or ¹⁷ improperly done, but affirms that the entire dwelling was erected, except as changed by the direction of the owners, as planned and specified, and in a competent and workmanlike manner, under the personal direction and supervision of the owners and with their express approval. The answer declares that the owners have sustained no loss through any breach of contract or neglect of the contractor, and asserts that the building is of stone which the owners had quarried on their property, and had insisted should be the material out of which the dwelling would be built, although they had been informed by the contractor that the stone was soft, porous, and unfit for building purposes, and that other material should have been obtained.

In addition, the contractor was furnished by the owners, for use in the construction, many of the frames and much of the timber, which were not suitable for the purpose to which they were required to be put, and it is to the use of these defective materials, under the direction and supervision of the owners, that the contractor ascribes the faults of which the owners now complain. In particular, the contractor maintains that the leaks which have developed are produced by the rain penetrating the porous stone of the walls, and producing a wet or damp condition that has occasioned the owners the losses of which they complain. The summary here made of the pleadings reveals the wide divergence of the parties with reference to what occurred in connection with the subject-matter of controversy. Much testimony was taken before the chancellor, who, at the conclusion of the hearing and the argument, passed a decree dismissing the cross-bill of the owners, and sustaining the mechanics’ liens of the furnace company in the sum of $1,879.14, of Robert S. Green, Inc., in the sum of $2,248.15, and of Tilghman V. Morgan, Inc., in the sum of $2,053.26, and declaring them paramount to the mortgage lien of the Johns Hopkins Hospital.

In the event that the owners should not pay these liens within the prescribed period, the decree provided for a sale by trustees of the building with an allotted ¹⁸ portion of the land necessary for its convenient use. From this decree, an appeal was taken by the owners. There are certain preliminary matters which may conveniently bé considered at the outset. In the first place, the mortgage lien of the Johns Hopkins Hospital is subordinate to whatever mechanics’ liens are here found to exist, because the mortgage lien was acquired after the buildings were begun.

Code, art 63, sec. 15. In the second place, whatever may be the right of the principal contractor to include in its claim the materials purchased of the subcontractor, Robert S. Green, Inc., and used in the erection of the buildings, the subcontractor is not entitled to a lien because it did not, nor did its agent, within sixty days after furnishing the materials, give notice in writing to the owners or agent, who resided within the county, of its intention to claim the lien. Code, art. 63, sec. 11. 1. The Mechanics' Lien Law provides that “if the contract for furnishing such work or materials, or both, shall have been made with any architect or builder or any other person except the owner of the lot on which the builditig may be erected, or his agent, the person so doing work or furnishing materials, or both, shall not be entitled to a lien unless, within sixty days after furnishing the same, he or his agent shall give notice in writing to such owner or agent, if resident within the city or county, of his intention to claim such lien.” Code, art. 63, sec. 11.

The claimant Robert S. Green, Inc., under a contract with a subcontractor engaged in work in the erection of buildings upon the premises of the owners, furnished sand and cement for use in such work from February 12th, 1932, to January 5th, 1933. The deliveries during this period were numerous and were made according to the requirements of the work. The aggregate of the account was $2,344.71. From January 5th, 1933, no further order was received by the claimant until April 6th, 1933, when the claimant delivered five bags of cement and one-quarter of a ton of sand at a charge for both ¹⁹ items of $3.44.

Notice of the claimant’s intention to assert a mechanics’ lien for the whole amount of $2,248.15 was given in writing to the owners on April 18th, 1933. The notice was confessedly too late to entitle the claimant to a lien for the charges to January 5th, unless the purchase made on April 6th revived the right to a lien by making this later date the one from which the reckoning of sixty days is to be made. ’ The difficulty in sustaining this contention is that there is no proof on the record that this last order and delivery was under a subsisting executory or incompleted contract. While it is true that work or materials may well be furnished by different workmen by separate deliveries, at varying intervals of time, yet the work done and the materials supplied must be under one continuous contract, in order that the date of the last work done or materials delivered shall be the day from which the period of limitation, within which the prescribed notice in writing shall be given, will be computed. The contract may be express, or it may be implied, but the burden of proof is upon the claimant.

German Lutheran Congregation v. Heise, 44 Md. 453, 469 ; Venable’s Syllabus of Law of Real Property (Brodie Ed.) 277-285; 287-290; Infra. There is no testimony of an express contract, but, in its absence, a contract from the beginning that the work or material should be done or furnished, and that the particular work or material was done or furnished with reference to that contract, may be implied from the nature of the account, the time within which the work was rendered or the materials were furnished and the object of the work or the use of the materials, and other evidential circumstances. Supra. In this case, the circumstances are not sufficient to gratify the burden of proof.

The item relied on was a single order after an interval of ninety days from the last preceding charge. It was f ollowed by no other. Moreover, this isolated charge was after the owners had occupied the residence for over four months, and after the contractor had done all its work of construction. It may be observed that, while the cement was of the kind there ²⁰ tofore used, the sand was of a grade which had never before been purchased.

There is testimony on the part of the claimant that one of the servants of the contractor, on the day of its delivery, ordered the material and used it on the buildings, but this is not sufficient for the material to be referable to the original undertaking, since the use was by workmen after the erection of the building was at an end and they had left the job, and for the distinct purpose of repairing past defective workmanship. Hensel v. Johnson, 94 Md. 729, 736, 737 , 51 A. 575 ; Brunt v. Farinholt-Meredith Co., 121 Md. 126 , 88 A. 42 ; Dugan v. Howard, 130 Md. 114, 120 , 99 A. 966 ; Gill v. Mullan, 140 Md. 1, 13 , 116 A. 563 ; Greenway v. Turner, 4 Md. 296 . In our judgment, the last material furnished was under a separate and distinct order, and its contemplated use was not in the construction but in the repair of buildings which had previously been imperfectly erected; and since these repairs were not sufficient in the aggregate to equal one-fourth of the value of the buildings, the claimant is not entitled to a lien in any amount. See Shacks v. Ford, 128 Md. 287, 288 , 97 A. 511 . 2.

Although the claim of Tilghman V. Morgan, Inc., general contractor, embraced the claim of L. J. Mueller Furnace Company for $1,879.14, the latter was entitled separately to file and establish its mechanics’ lien, which would be operative and effective no matter what might be the actual result of the lien filed by the principal contractor and an accounting between it and the owners. So, it is necessary that this claim be decided 'as a distinct controversy. Treusch v. Shryock, 51 Md. 162 . Charles J. Everist, the subcontractor who was engaged by the general contractor to install the Mueller-Sturtevant Climator Air Conditioning System for the purpose of heating the buildings to be erected, made a contract with the present claimant, which agreed that it would furnish to the subcontractor, Charles J. Everist, for installation and use in the home of the owners, the materials and labor, at the prices stated, aggregating the total of $1,879.14, as set forth in the bill of particulars, which is a part of the ²¹ mechanics’ lien as filed.

The labor was rendered in connection with the electrical wiring required, and 'amounted to $66. The sum of $259.43 was for registers and grilles which were furnished as part of the equipment of heat outlets throughout the house, and there was a charge of $9 for copper pipe of a specified size and type. The aggregate of these three items is $334.43, and the residue of the claim, or $1,544.71, is for a furnace, fan, washer, filter, and control, as specified in the contract between the general contractor and the owners. The claimant furnished as agreed all the items of labor and materials which composed its claim.

Nor is there any dispute that the necessary papers, notice, and other procedure have all been filed or taken to make the claim of the L. J. Mueller Furnace Company an enforceable mechanics’ lien. So, there can be no denial that the claimant is entitled to a minimum lien of $334.43 for the three items mentioned of labor and material provided. The owners, however, contend the lien should be annulled because the furnace and its equipment were inadequate to heat the house to seventy degrees in zero weather. The record establishes the fact that the heating system installed does not uniformly heat the house to this temperature when the weather is at zero.

Furthermore, the representative of the claimant inspected the installation of the system after its completion, and, on December 14th, 1932, certified to the general contractor that the heating system had been properly installed by the subcontractor Everist. It follows that, there having been a proper installation of the other parts of the system of heating, with the mechanical devices provided for the control and regulation of the delivery of the requisite degree of heat throughout the building, any failure of the system must be attributed to the inadequacy of the furnace, and, so, the problem is reduced to the inquiry what warranty was undertaken by the claimant with respect to the capacity of the furnace, with its described equipment, to heat the specified building. There is no term of the contract by which the owners ²² were expressly assured that the heating system should meet 'any prescribed test, but it is conceded that, in the locality where the building is erected, the standard test which is customarily used to determine the 'adequate capacity of a heating system is the one here asserted. In addition, the claimant was the manufacturer and seller of the goods sold, and knew the proposed use to which the goods were to be devoted, and the service which they were expected to provide.

The evidence further established that the owners relied on the skill and judgment of the seller in the determination of the type and capacity of the furnace and its accessories. In addition, the goods mentioned were to constitute a part of an interrelated system of heating, in which the claimant had special knowledge and experience beyond any which could be imputed to the owners. Notwithstanding the goods were specified by their trade-name, these circumstances give rise to an implied warranty that the particular furnace and its specified equipment should be reasonably fit to heat the building contemplated at the time of the contract to a temperature of seventy degrees in zero weather. Code, art 83, sec. 36, subsec.

(1).; and compare subsection (4) ; Luria Bros. & Co. v. Klaff, 139 Md. 586, 593 , 115 A. 849 ; Hubbard Fertilizer Co. v. American Trona Corp., 142 Md. 246, 249 , 120 A. 522 . Since the owners have kept the goods, they may, by way of subrogation in these proceedings in equity, set up against the claimant any breach of this implied warranty in diminution or extinction of the price. See article 83, section 90, subsec. (1) (a).

The implied warranty is not of absolute capacity, but of being reasonably fit to heat. Furthermore, the building was not begun when the contract was made, so the matter of the warranty had reference to the structure that was to be erected in accordance with the plans and specifications as embodied in the contract with reference to which the claimant executed its contract. So, if the building actually erected was a structure which substantially deviated in any material respect from the structure which was originally contemplated, and thereby rendered necessary ²³ the installation of a furnace of greater capacity in order to produce sufficient heat, there would be no breach of the warranty implied. It is plain that the owners may not change the subject-matter of the implied warranty and enforce the warranty.

The calculations of the heating capacity required were made upon the plans and specifications submitted to the claimant by the owners. They were first made by the local representative of the claimant, and then forwarded to its principal place of business, where the question was again considered, and all the figures verified and checked by expert engineers of the claimant. On a careful analysis, it was concluded that, when sufficient allowance had been made for the heat loss of a structure of the size and arrangement of the building proposed to be built, the heating system must produce 435,334 British Thermal Units per hour. The furnace recommended and installed had a maximum capacity of about 950,000 British Thermal Units per hour, and when operated in connection with the system installed would have a capacity of 650,000 British Thermal Units per hour, or a safety allowance of almost 50 per centum per hour over the minimum requirement.

It was the testimony of both of the expert engineers of the claimant that the furnace and its equipment were adequate to heat the building to seventy degrees in zero weather, if the building bad been constructed in a proper manner in conformity with the plans and specifications submitted. It was estimated that even in zero weather the plant’s capacity was 25 per cent, more than was required to meet the implied warranty. On their part, the owners produced a witness, who had visited the premises and made his investigations in September, 1934, after the owners had occupied the premises for almost two years. His estimate was that, to heat the building as constructed, a capacity of 512,353 British Thermal Units per hour was required to gratify the implied warranty.

He further testified the furnace installed had a capacity of 547,200 British Thermal Units per hour, which is in excess of the necessary capacity. He stated ²⁴ that on looking up the rating of the furnace installed he found it to be given at 954,000 British Thermal Units per hour, which, when subjected to an efficiency discount upon this rating, was reduced to 572,400, which is slightly over 60,000 British Thermal Units per hour more than his estimate of a sufficient capacity to supply the heat expected. In this connection it should be stated that the testimony of the expert for the owners with reference to the distribution and velocity of air through the ducts into the various parts of the house through the grilles and registers has been considered, but, on account of the length of time that had intervened since the installation, and the obviously incomplete, hurried, and inadequate investigation made, without any actual knowledge of the adjustment of the mechanical devices that controlled the flow and distribution of the heated air through the ducts, there is not much evidential value to be accorded his conclusions on the efficiency of the distribution originally provided. So, without further statement of details and analysis, the deduction to be made from all the testimony of the expert witnesses for the claimant and the owners is that the furnace and its equipment, which were specified and installed, were reasonably fit for the purpose for which they were designed.

Hence, there is no breach of warranty by the claimant if the failure adequately to heat the building ultimately erected was either because the structure differed materially from the plans and specifications submitted, or because of a failure to use proper material or reasonably careful workmanship in its construction. The structural deviations were the closing of a large window in a second-story room and putting in its place a chimney from the same room with smaller windows on either side; and the reduction of the thickness of the insulation in the ceiling of the chapel from the three inches called for in the specifications to the two inches used; the omission to install insulation in some exposed parts of the building; the failure to use sheathing in the ²⁵ five gable ends of the building and to waterproof portions of the foundation wall. In addition, the use of green timber caused a shrinkage which opened joints between the timber work and the outside stucco of the gable ends. Whether, through the nature of the material used or faulty design or workmanship, there was dampness throughout the structure and moisture or water in parts of the cellar which the claimant could not reasonably be expected to anticipate and allow for in its decision of the nature of the system to be adopted or in its estimate of the heating capacity of the furnace and accessories which would be requisite under a standard construction of an edifice in conformity with the design and specifications submitted.

The testimony must be accepted that the conditions which here developed caused material heat leakage, a necessity for a greater volume of hot air, and unfavorable operative conditions which demanded either a different type of heating or a greater capacity than the claimant had any sufficient reason to provide. The court cannot accede to the argument that the adverse conditions enumerated have been either permanently or temporarily corrected, so as substantially to make the building the one contemplated 'by the claimant, in its estimate and contract, and, notwithstanding these asserted remedial efforts, the furnace remains inadequate. The facts which lead to the rejection of this contention need not be recapitulated. It is sufficient to state that, in the cross-bill begun in the cause at bar by the owners against the general contractor, and filed so late as December 28th, 1933, and, therefore, speaking as of that date, which is later than any of the asserted corrections of structural defects, the owners, through their counsel, declare, in the present tense in the- sixth paragraph, that “* * * * it has been impossible to adequately heat said house.” The paragraph from which this excerpt is quoted sets forth in general terms the matters of which the owners complain, and when the whole was read to one of the owners on the witness stand, he stated that it was their answer or cross-claim against the general contractor. ²⁶ The court is of the opinion that the chancellor was right in sustaining the lien of the L. J. Mueller Furnace Company, which it finds installed what it had agreed in fulfillment of the implied warranty.

The owners had contributed to the delay in the completion of the building, and they make no claim for damages, because the undertaking of the general contractors to deliver possession was conditional on the absence of any act or neglect on the part of the owners that was responsible for it. The owners did, however, take possession of the premises while the general contractor was at work, and began their occupancy on November 15th, 1932. The house is an unusual one. It is 'built of stone, with tower and five gables, a chapel and cloister, and a garage, and with all of the edifice assembled under a stone roof.

Sumner A. Parker, one of its owners, was its architect. Although the working plans were drawn by a third party, the design was the conception of Parker and the contract between the owners and the general contractor specifically designated the architect to be Sumner A. Parker, and in that technical relation, as well as in that of one of the owners, by virtue of a tenancy by the entireties with his wife, the other contracting owner, the parties were bound. While an engineer by profession he took upon himself the duties of an architect, and by the terms of the contract he was given and assumed the general supervision and direction of the construction, with authority to stop the work whenever such stoppage might be necessary to insure the proper execution of' the contract, and with the duty imposed to use his powers under the contract to enforce its faithful performance by the contractor and the owners. In the performance of his duties, and the care of his interests, Parker was there daily in the active supervision and direction of the work.

He inspected the work as it progressed, conferred with the general contractor or its representatives and exercised such control as was necessary. The owners supplied ninety per centum of the immense tonnage of stone that went into the erection of the building; much timber was cut from the live ²⁷ oak and the chestnut trees that had died of the blight in the woods on the premises. Soon after they began to live in their new home, the owners moved there their valuable furniture and personal property. Conditions arose from which damages were sustained, and the owners attributed their loss to defects in the material and construction of the building for which the general contractor was responsible.

They further charged that their property had not been built in accordance with the plans and specifications. These controversies gave rise to a number of questions. It will save repetition to state them as they will consecutively be considered. I. The first group of complaints consists of the alleged failures of the general contractor to do things which were required by the contract.

A. The general contractor did not damp-proof with asphalt the exterior surface of the north cellar and walls from floor to grade. The contractor admits this breach, but asserts that it was committed with the acquiescence of the owners. Under the circumstances this position is not tenable, as it rests upon an inference that is in conflict with the direct