GENERAL FIREPROOFING CO. v. L. WALLACE & SON. TITLE GUAR- 1. CONTRACTS (§ 346*)-ACTION FOR BREACH OF BUILDING CONTRACT-PLEAD ING. A petition in an action on a building contract, which sets out the contract and alleges a failure to comply therewith because of the use of defective materials and improper workmanship, is sufficient to warrant a recovery according to the legal effect of the contract, either on an express or implied warranty. [Ed. Note. For other cases, see Contracts, Cent. Dig. § 1748; Dec. Dig. § 346.*] 2. CONTRACTS (§ 205*)-BUILDING CONTRACT-CONSTRUCTION-IMPLIED WAR BANTY. Defendant, a company engaged in the work of fireproofing buildings, contracted to furnish all materials and perform all the labor in connection with the work of fireproofing a large hotel building under construction, including concrete floors, stairways, fireproof partitions, etc., and also to furnish the structural steel required for the building, which it did not manufacture. Held, that an express warranty in the contract that such steel should be sufficient to carry loads as specified by the architects did not exclude an implied warranty that the contract for the fireproofing work should be performed in a workmanlike manner, and all materials used should be suitable to render the construction fit for the purposes intended. [Ed. Note.-For other cases, see Contracts, Cent. Dig. §§ 878, 905; Dec. Dig. § 205.*] 1 3. CONTRACTS (§ 290*)-ACTION FOR BREACH OF BUILDING CONTRACT-APPROVAL BY ARCHITECT-WAIVER. Under a building contract providing that the work should be done in accordance with the specifications and drawings of the architects and under their supervision, that their decision as to the true construction of the specifications and drawings should be final, and that they might condemn materials or work and cause the same to be removed, but also that no certificate given by them or payment made thereon except the final certificate or payment should be conclusive evidence of the performance of the contract, or construed as an acceptance of defective work or improper materials, where final certificate was not given nor final payment made, the contractor was not relieved from liability on account of defective work or improper materials because the architects did not condemn the same as the work progressed. [Ed. Note. For other cases, see Contracts, Cent. Dig. § 1317; Dec. Dig. § 290.*] 4. CONTRACTS (§ 287*)—ACTION FOR BREACH OF BUILDING CONTRACT-DEFENSES-WAIVER. In an action against a contractor for fireproofing a building to recover damages for breach of contract and injury to the building alleged to have been due to the use of improper materials, and the improper mixing of the concrete of which the floors were made, by reason of which they expanded and cracked the walls of the building, which breach of contract was denied, the facts that the architects under whose supervision the work was done permitted it to continue, and gave partial certificates on which payments were made after the injury to the walls was known, while pertinent evidence for defendant, did not operate as a conclusive •For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes † Rehearing denied April 15, 1910. waiver by the owner of the right to recover damages when not made such by the contract, and where the cause and extent of the injury to the walls were not at the time apparent. [Ed. Note. For other cases, see Contracts, Cent. Dig. §§ 1330-1332; Dec. Dig. § 287.*] 5. APPEAL AND ERROR (§ 171*)-REVIEW-ESTOPPEL TO ALLEGE ERROR-NATURE AND THEORY OF CAUSE. That a court permitted a building contractor to maintain a joint action against a subcontractor and the surety on its bond, and to recover therein damages on account of injury to the building by reason of alleged defective work done by the subcontractor, without proof that plaintiff's liability to the owner of the building for such injury had been adjudicated or its extent determined, is not ground for reversal of the judgment by an appellate court, where no objection on that ground was made in the trial court, but defendants acquiesced in the theory on which the action was brought, and at their request the question of plaintiff's liability to the owner of the building was submitted to the jury, and an affirmative finding thereon made a condition to recovery against the defendants. [Ed. Note. For other cases, see Appeal and Error, Cent. Dig. §§ 13531355; Dec. Dig. § 171.*] 6. COURTS (§ 352*) — FEDERAL COURTS - FOLLOWING PROCEDURE OF STATE COURTS-VERDICT-EFFECT OF SPECIAL VERDICT. Where, in an action in a federal court to recover from a building contractor for a breach of contract by alleged defective work, the jury under proper instructions as to the measure of damages returned a special verdict finding the amount of damages caused by the failure of defendant to perform its contract, a general verdict for plaintiff for such amount less the amount of a final payment which would have been due defendant under the contract if properly performed was consistent with the special verdict and proper, regardless of the technical rules of procedure governing the local courts of the state. [Ed. Note.-For other cases, see Courts, Cent. Dig. § 927; Dec. Dig. § 352.* Conformity of practice in common-law actions to that of state court, see notes to O'Connell v. Reed, 5 C. C. A. 594; Nederland Life Ins. Co. v. Hall, 27 C. C. A. 392.] In Error to the Circuit Court of the United States for the Northern District of Iowa. Action by L. Wallace & Son against the General Fireproofing Company and the Title Guaranty & Surety Company of Scranton, Pa. Judgment for plaintiffs, and all parties bring error. Affirmed. A. H. Sargent and Frank Hagerman (F. H. Atwood, on the briefs), for General Fireproofing Co. and Title Guaranty & Surety Co. John N. Hughes and Frank F. Dawley, for L. Wallace & Son. Before SANBORN and VAN DEVANTER, Circuit Judges, and POLLOCK, District Judge. POLLOCK, District Judge. The above numbered and entitled cases arose out of one transaction, were argued and submitted on the same record, and will be considered together as one case. The facts necessary to a decision may be briefly summarized, as follows: In the year 1904 the Cedar Rapids Hotel Company, desiring to erect in the city of Cedar Rapids, Iowa, a six-story hotel, now built and ocFor other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes cupied by it and known as the "Montrose Hotel," entered into a contract with L. Wallace & Son, a firm of contractors and builders (hereinafter called "original contractor"), to furnish all materials and perform all labor required in building, erecting and finishing said hotel building complete, above the basement story, ready for occupancy and use by the hotel company as a hotel. This contract is the general form used by the American Institute of Architects and the National Association of Builders, and has attached thereto particular specifications and requirements for the doing of the work, furnishing the materials, for supervision of the work by the architects, the making of estimates and payments thereon, etc. On September 21, 1904, thereafter, the original contractor entered into a subcontract with the General Fireproofing Company (hereinafter called the "Fireproofing Company") to furnish all materials and perform all labor in connection with the work of fireproofing the hotel according to the expanded metal system of construction, the laying of walks, floors, roof, etc. In this contract the original contractor was designated for convenience as owner and the Fireproofing Company as contractor. This contract contains, among others, the following provisions: "Article I. The contractor shall and will provide all the materials and perform all the work for the fireproofing of the Third Avenue Hotel, located at Cedar Rapids, Iowa, according to the expanded metal system of construction and consisting of the following: "The erection of the concrete and expanded metal floors ready to receive wooden floor strips or the foundation for mosaic or other floors, and ready to plaster underneath, the roof ready for tar and gravel, the partitions of metal studding and lathing and a suspended ceiling under the roofs ready to plaster, a rough concrete sidewalk ready to receive the 3" top, and the concrete stairs with smooth trowel finish. "Contractor agrees to furnish and erect all necessary steel, including columns, beams, girders, wall lintels, plates, anchors and stair carriages, and guarantees the structural steel to carry loads shown and specified, and to furnish a bond to cover this part of the work as required by the specifications. "Work to be executed as shown on drawings and described in specifications prepared by the Josselyn & Taylor Co., architects, in connection with the drawings submitted by the contractor, and which are a part of this contract. "Art. II. It is understood and agreed by and between the parties hereto that the work included in this contract is to be done under the direction of the said architects and that their decision as to the true construction and meaning of the drawings and specifications shall be final. * "Art. IV. The contractor shall provide sufficient, safe and proper facilities at all times for the inspection of the work by the architects or their authorized representatives; shall, within twenty-four hours after receiving written notice from the architects to that effect, proceed to remove from the grounds or buildings all materials condemned by them, whether worked or unworked, and to take down all portions of the work which the architects shall by like written notice condemn as unsound or improper, or as in any way failing to conform to the drawings and specifications, and shall make good all work damaged or destroyed thereby. * "Art. X. It is further mutually agreed between the parties hereto that no certificate given or payment made under this contract except the final certificate or final payment, shall be conclusive evidence of the performance of this contract either wholly or in part and that no payment shall be construed to be an acceptance of defective work or improper materials." In compliance with the specifications for the doing of the work which were prepared by the architects Josselyn & Taylor Company, and which became a part of this contract by adoption under the provisions of article I, the Fireproofing Company procured the Title Guaranty & Trust Company of Scranton, Pa. (hereinafter called the "Guaranty Company"), to execute and deliver its bond to the original contractor for the faithful performance of its obligations, in terms, as follows, to wit: "Know all men by these presents: That the General Fireproofing Company, a corporation organized under the laws of the state of Ohio (hereinafter called the principal) and the Title Guaranty & Trust Company of Scranton, Pa., a corporation created and existing under the laws of the commonwealth of Pennsylvania, and whose principal office is located in the city of Scranton, commonwealth of Pennsylvania (hereinafter called the surety), are held and firmly bound unto L. Wallace & Son, of Cedar Rapids, Iowa (hereinafter called the obligees), in the full and just sum of twenty-five thousand six hundred sixty dollars ($25,660.00) lawful money of the United States, to the payment of which sum, well and truly to be made the said principal binds itself, its successors and assigns jointly and severally firmly by these presents, signed, sealed and delivered this 30th day of September, A. D. 1904. "Whereas, said principal has entered into a certain written contract with the obligees, dated September 21, 1904, wherein and whereby the said principal agrees to provide all the materials and perform all the work for the fireproofing of the Third Avenue Hotel, located at Cedar Rapids, Iowa, according to the expanded metal system of construction and consisting of the following: "The erection of the concrete and expanded metal floors ready to receive wooden floor strips on the foundation for mosaic or other floors, and ready to plaster underneath, the floors ready for tar and gravel, the partitions of metal studding and lathing, and a suspended ceiling under the roofs ready to plaster, and rough concrete sidewalk ready to receive the 3" top, and the concrete stairs with smooth trowel finish. "Contractor agrees to furnish and erect all necessary steel, including columns, beams, girders, wall lintels, plates, anchors, and stair carriages. "Now, therefore, the condition of the foregoing obligation is such that if the said principal shall well and truly indemnify and save harmless the said obligees from any and all pecuniary loss resulting from the breach of any of the terms, covenants and conditions of said contract on the part of said principal to be performed, then this obligation shall be void; otherwise, to remain in full force and effect both in law and in equity. "The said principal and the said surety hereby especially guarantee that the structural steel to be erected under said contract to carry loads as shown and specified. "The surety to this bond is expressly exempt from liability for any damage resulting from any act of God, or public enemies, or mobs, or riots, or civil commotion, or by employés leaving the work being done under said contract on account of so-called 'strikes' or labor difficulties. "In testimony whereof the said principal and the said surety have caused these presents to be executed by their proper officers the said day and year first above written." Under the provisions of these contracts the construction of the building was begun and proceeded with by the contracting parties in convenient relation, the original contractor carrying up the brick walls, and the Fireproofing Company following with the laying of the concrete floors and other fireproofing work until the month of March, 1905, at a time when the fourth floor of the building had been laid and work was progressing on the fifth story when cracks were discovered in the outer walls of the building. These cracks first appeared on the Third street side of the building; later, on the Third avenue side. In some instances they were in perpendicular lines breaking through the bricks; in other cases in diagonal lines running through the joints between the bricks and between the brick and stone work of the building. At first these breaks or lines of cleavage were noticeable on the outer side of the wall only, but gradually enlarged until they extended through the walls to the interior side. The concrete used by the Fireproofing Company in the building was what is known as cinder concrete. During the construction of the building, cold weather having intervened, two of the floors froze in setting, and the Fireproofing Company was compelled to and did take them out and relay the floors. There also arose a controversy between the original contractor and the Fireproofing Company as to whose duty it was, under the terms of the contract, to furnish the false jambs used in the construction of the interior metal fireproofing partitions. These jambs were ultimately furnished by the original contractor at a cost of $800. The roof of the building as constructed by the Fireproofing Company proved to be defective, sagged and had to be repaired. The walls of the building were finished, the floors laid, and the roof in place about April 1, 1905, and the work to be done by the Fireproofing Company under its contract, in so far as completed by that company at any time, was finished. about the middle of the month of September, 1905, at which time it removed its men, materials, and implements employed in the doing of the work from the grounds. Payments were made to the Fireproofing Company on estimates of the architects from time to time, until of the contract price agreed to be paid that company there remained a balance of $7,264.13 unpaid. Thereafter, on the 9th day of September, 1906, the original contractor having failed, on account of defects claimed by the hotel company in the building as constructed, to secure a certificate from the architects in charge of construction of the completion of the building as required by the contract, and the hotel company at the time withholding from the original contractor the sum of $16,000 of the contract price, commenced this action jointly against the Fireproofing Company on its contract, and the Guaranty Company on its contract of guaranty, to recover the damages alleged to have been sustained to the building by reason of the failure of the Fireproofing Company to keep and perform its contract. The damages laid in the amended petition on which the case went to trial comprise five items, as follows: (1) Expense of taking down and repairing walls, $3,000; (2) damages sustained by reason of faulty construction of roof, $8,000; (3) damages sustained by reason of defects in construction of floors, $2,800; (4) amount expended in furnishing false jambs required in constructing interior metal partitions, $800; (5) total damages sustained to building by reason of the Fireproofing Company having failed to comply with its contract, $45,000. As to these claims for damages the court withdrew from the consideration of the jury all consideration of the third demand for damages on account of faulty construction of the floors. The architects in charge of the work decided under a true construction of the contract and specifications the duty of furnishing the false jambs for which the fourth demand was made rested with the Fireproofing Company. There seems to be no controversy over the correctness of this decision, as the contract between the parties made the decision of the architects |