William Dall Co. v. Butcher

Adkins, J., delivered the opinion of the Court. The William Dali Company, the appellant, having a contract with the United States Government for the construction -of an immigration station in Baltimore City, decided to give out a subcontract for “the stone work, ornamental terra cotta, structural terra cotta and gypsum or tile blocks in said immigration station,” and obtained bids therefor, ranging from -eighty-odd thousand dollars down to seventy-six thousand, which was the bid of the appellees. The amount to be paid the appellant for the construction of the station was two hundred and forty thousand dollars, of which the materials ■•and work involved in the proposed subcontract was estimated by the appellant in their bid to the Government at sixty-eight thousand dollars. The bid of the appellees for the subcontract was rejected, whereupon it was reduced to seventy-two thousand dollars, which reduced bid was also rejected; and after considerable •negotiation the following written proposition was submitted by the appellees and accepted by the appellant, viz: “Baltimore, Md., November 15, 1915. “Messrs.

Wm. Dali & Co., “Washington, D. O. “Gentlemen: Re: Immigration Pier. “We propose to furnish all labor and materials, tools, appliances and scaffolding necessary to fully complete in every detail, according to the plans and specifications, all stone work, brick work, ornamental terra cotta and structural terra cotta and gypsum or tile ²⁷ blocks, as described in the following portions of the specifications: “Under the heading Stonework, paragraphs 252 to 261, inch, on pages 21 and 22. “All work under the headings of brick work, ornamental terra cotta and gypsum blocks, as specified on pages 22 to 25, inch, except paragraphs 320, 321 and 322, which are not included, for the sum of sixty-eight thousand dollars ($68,000.00), agreeing to divide with you equally half and half the profits in the job. “The actual cost of the work to be reckoned on a basis of the actual amount paid to mechanics and laborers actually employed on the work and the net amounts paid for materials used in the work. “It is understood that no foreman, superintendents, or clerks’ salaries or office expense shall be included in the cost of the work. “It is further agreed and understood that Wm. Dali & Co. will make advance, if required, to the extent of fifty per cent. (50%) of the pay rolls for labor.

Payments to be made monthly to us for labor and material in accordance with the payments made by the U. S. Government on the work. Pinal payment to be made when the above work is completed and accepted by the Government. “Yours very truly, “(Signed) Butcher & Williams, “Witness: By David C. Butcher. “(Signed) Warren Griffiss. “Attest: “(Signed) J. W. Penton. “Accepted: “The William Dali Co., “(Signed) Joseph Dali, Yice-President. “November 18th, 1915.” As the work under this subcontract neared completion in about two years, it was found that, instead of a profit, a loss of two thousand, six hundred and seventy-nine dollars and ²⁸ eighty-four cents ($2,679.84) resulted, and on June 18th, 1918, after an ineffectual effort to induce the appellant to share this loss, the appellees filed their bill of complaint, in which they alleged, among other things, that the appellant approached the appellees with reference to taking the above mentioned subcontract; that their estimates differed as to the amount of material which it would take to do and complete the work; that appellees’ estimate was larger than that of the appellant; that appellant insisted that its estimate was correct and that appellees’ was too high; that appellees finally proposed that they would lower their estimate to $68,000.00, but, fearing a loss at that figure, notwithstanding the insistence of appellant that money could be made at that figure, also proposed that appellant should stand one-half of any loss that was sustained and should receive one-half of any profits that were made by appellees; that said proposition was accepted by appellant; that said proposition and understanding were oral in the first instance and were to be put in writing; that thereafter the contract above set out was drawn up; that by a mistake made by the draftsman of said contract it omitted to say anything about the appellant standing one-half of the loss, which omission was not noticed by appellees at the time, nor was the same noticed by them until at or about the time of the completion of the work covered by said contract. The bill further alleges that, after the execution of said contract, appellees entered upon the performance thereof and have completed the same at a loss of between twenty-five hundred ($2,500) and three thousand dollars ($3,000); that appellant has refused to stand any part of said loss, and that appellees are without adequate remedy at law, and are entitled to have said contract reformed in accordance with said oral agreement, and are entitled to receive from appellant one-half of any loss sustained by them in accordance with the terms of said oral agreement. The prayer of the bill is: ²⁹ “(1) That the contract may be reformed so that by the terms thereof appellant shall be liable to appellees for one-half of any loss sustained by them in the job; “(2) That after the reformation of said contract appellant may be required to pay appellees such sums of money as may be found to be due them under said contract as reformed; “(3) For further relief.” The answer filed by appellant on September 19th, 1918, admits that it entered into said written contract, but denies the allegations as to mistake of the draftsman and as to the oral agreement to share losses; and avers that it never heard of any such claim until long after the completion of said contract by appellees; and that it was not until the bill of complaint was filed that plaintiffs ever pretended there was any agreement between the parties at any time concerning any loss that might arise or grow out of the transaction.

To this answer the general replication was filed on October 1st, 1918; testimony was taken, and the Court below decreed that the contract be reformed by adding to said contract, after the words “Agreeing to divide with you eqtially half and half the profits of the job,” the following words: “You to repay us half of any losses suffered by us on the job”; and that said addition should have the same force and effect as if originally written in said contract by the parties thereto, and, further, that appellant pay to appellees the sum of $1,339.92 and the costs of suit. From which decree an appeal was duly taken to this Court. Before reviewing the testimony, it may be well to state the law applicable to this case. It is simple and undisputed.

Before a written contract can be reformed by a Court of Equity on the ground of mistake it must appear that the mistake was mutual. Boulden v. Woods, 96 Md. 332 ; Hopkins v. Neal, 128 Md. at page 256, and cases therein cited. The mistake must be proved beyond a reasonable doubt. The evidence must be full, explicit and satisfactory.

Second ³⁰ National Bank v. Wrightson, 63 Md. 81 ; Keedy v. Nally, 63 Md. 311 . A mere preponderance of evidence is not sufficient. Philippine Sugar Co. v. Philippine Islands, 247 U. S. 385 ; United States v. Budd, 144 U. S. 154 . There must he due diligence in the application for relief,, and time runs from the time the mistake was discovered or could have been discovered by due diligence.

Wood v. Patterson, 4 Md. Ch. 335 ; Hewitt's Appeal, 55 Md. 509 ; Hunt v. Stuart, 53 Md. 225 ; Keedy v. Nally, 63 Md. 311 ; Citizens Ins. Co. v. Conowingo Co., 116 Md. 422 ; Stiles v. Willis, 66 Md. 552 . Now, as to the proof: There were five persons who took part in the negotiations leading up to the making of the contract, all of whom were witnesses, viz: Warren Griffiss, General Manager of the Baltimore Brick Company ¿ the concern which furnished the bricks; David C. Butcher and Charles H. Williams, who composed the firm of Butcher & Williams, the appellees; H. C. Newman, Superintendent, and Joseph Dali, Vice-President of the William Dali Company, the appellant. In addition to the facts above set out, the following facts were admitted, or at least not controverted, viz: (a.) That there was a difference of 130,000 between the estimate of appellees and appellant as to the number of bricks that would be required, and the actual number used was 100,000 in excess of appellant’s estimate.

(b) That Newnam and Joseph Dali insisted there was a profit in the job of $8,000.00 at their estimate of $68,000.00. Griffiss testifies that Mr. Newnam was absolutely convinced his figures were all right and that there was a profit in it at $68,000. (c) That appellees were willing to reduce their original bid because they had an “unusual amount” of scaffolding which they had acquired in connection with a previous job for the Bethlehem Steel Company. ³¹ (d) That the original draft of the contract was made by Griffiss on the day the agreement was reached, and that the contract as, executed was an exact copy of this,