Audubon Bldg. Co. v. F. M. Andrews & Co., 187 F. 254

Audubon Bldg. Co. v. F. M. Andrews & Co.

187 F. 254 | 5th Cir. | 1911

PARDEE, Circuit Judge

(after stating the facts as above). [1] As the contract, which is the basis of the demands made in this suit, provides for separate items and the price is apportioned to each item, it is severable (see 2 Parsons on Contracts, 517), and it may be shortly stated as follows: To furnish the preliminary sketches for 1 per cent, on the cost of the building, and payable on the acceptance thereof; for the working drawings and specifications two per cent, and payable on completion; for supervision of the construction 2 per cent, to be paid pro rata with the architect’s certificates issued during the progress of the work. It seems to be a conceded fact that the preliminary sketches had been made and substantially accepted prior to the execution of the contract in writing for compensation; and that prior to default $12,000 had been paid therefor leaving the sum of $3,000 due on that item. The contract was one of agency, and the general rules in regard to principal and agent apply.

[2] As to this particular agency, it is well settled that an architect employed to furnish the working plans and specifications and to superintend the construction of a building is the agent of the owner, and in such relation his first duty is that of good faith and loyalty to his principal; and hence he should have no pecuniary interest in the performance of the contract for the work assigned by him, nor can he act as the agent or representative of furnishers and contractors or receive from them any páy, remuneration, or compensation except with the full knowledge of his principal; and any breach of duty or good faith in this respect destroys his right to compensation and commission, not only on the ground of actual damage or prejudice to the principal, but on grounds of public policy. 2 Ency. Law, 815, 816; 34 Cyc., and cases cited.

We do not understand that these propositions governing the relation between the parties are at all disputed; the contention of counsel for the defendant in error being that under the particular facts *259of the case they are not applicable here, and, if applicable, then they are to be restricted to the severable part of the contract which provides for commissions for superintending the work, '['lie argument is that it was only in relation to the superintendence of construction that the arrangement with McWilliams & Co. could in any wise affect or prejudice the plaintiff in error.

The first bill of exceptions shows that the agreement admitted to have been made between Andrews & Co. and McWilliams & Co., under which the latter were to prepare the working plans and specifications covering the mechanical construction and equipment of the proposed hotel, was that, if the said McWilliams & Co. as bidders for that portion of the work should obtain the contract therefor, no charge would be made by them for their services, whereas, unless they did obtain the work, they should be paid by Andrews & Co. for their services 3 per cent, of the cost of the work; and, in regard to the mat-' ter, the same hill shows that the plaintiff offered evidence tending to prove that such an arrangement was customary among architects in the East where Andrews & Co. practiced their profession; that McWilliams & Co. were distinguished experts and mechanical engineers, and that the purpose and effect of the arrangement was to give the architects and the owners the benefit of their technical knowledge and experience; that McWilliams & Co. were not manufacturers, but purely mechanical engineers and contractors; that, except as manufacturers, no advantage as a bidder could result to McWilliams & Co. for preparing such plans and specifications ; and that the fact that McWilliams & Co. would be the only bidder for the mechanical equipment could not have been known to Andrews & Co.

[3] So that we inay take it as undisputed that the special arrangement was made, and, if it was in any wise in derogation of the duties owed by Andrews & Co. to the hotel company, then it deprived Andrews & Co. of all right to compensation under any part of the severable contract of employment in which the arrangement could have any bearing or influence. It needs no argument to show — in fact, counsel seems to admit — that that part of the contract for 2 per cent, for superintendence was clearly affected by, as they termed it in argument, “the indiscreet arrangement” made between Andrews & Co. and McWilliams & Co.; but, as to its effect upon that part of the contract which related to the furnishing of working plans and specifications, it is claimed that, under the explanatory evidence and facts proved, it could have had no effect whatever, for in regard to such plans and specifications it made no difference to the hotel company whether the. actual work was done by Andrews & Co., or under llieir supervision by somebody employed by them; and that as McWilliams & Co. were not manufacturers, and, as no one knew how many bidders there would be for the mechanical equipment, the arrangement did not affect the. bid, and therefore it did not affect the amount that the Hotel Building Company would have to pay for such mechanical equipment.

We cannot agree with these contentions. Under the contract of employment, the architects owed their best skill, judgment, and experience, and they had no power to delegate their duties. See 2 Ivncy. Taw, p. 822. Under the arrangement, if McWilliams & Co. should *260turn out to be the successful bidder for the mechanical equipment, Andrews & Co. would not have to p^y for the work in drawing up the working plans and specifications for the mechanical equipment — a very large sum amounting to nearly $9,000 — and yet they would get full pay therefor without having done the work. Under these circumstances, how could they give their best judgment and experience, to say nothing of good faith, in passing upon the working plans furnished by McWilliams & Co. or in advising their principal as to the best bid for furnishing'and installing the mechanical equipment?

The fact that thereafter McWilliams & Co. were the only bidders for the mechanical equipment instead of aiding to relieve the architects by showing that no injury could have resulted rather tends to accent the suspicion that the law throws on the propriety and good faith of the admitted arrangement. We think it clear that the arrangement between Andrews & Co. and McWilliams & Co. as a matter of law based on sound public policy deprived Andrews & Co. of the right to recover at law compensation for furnishing the complete working drawings 'and specifications for the Audubon Hotel Company.

. The verdict of the jury was in favor of the plaintiff for $45,000 subject to a credit of $12,000. This verdict shows that the jury allowed compensation under that part of the severable contract providing for furnishing the working plans and specifications, and denied commissions for superintendence of construction; and this brings us to consider whether the errors relating to the trial judge’s instructions to the jury are well taken. The judge’s charge did not sufficiently and clearly cover the law of the case, but it was not specifically excepted to, and each one of the refused special charges is subject to criticism which warranted the refusal to instruct the jury as therein requested.

However, the necessity for more specific instruction in relation to the effect of McWilliams’ agreement than that given in the charge of the court was called to the attention of the court and decidedly emphasized' by the special instructions requested and as shown by the eighth bill of exceptions as follows:

“Evidence having been offered by tbe plaintiffs and tbe defendant tending to Show the facts as set forth in bill of exception No. 1, and argument having been heard and the court having charged the jury as set forth in bill of exception No. 1, and having failed otherwise to instruct the jury upon the subject of the McWilliams & Oo. agreement with the plaintiffs and the issue raised thereon, defendant then and there excepted in open court before the jury, and before the withdrawal of the same.”

[4] And we are clear that under the admitted facts in the case, in the light of the specific instructions requested, the judge was called to give the substance of the refused charges discriminating as to the several items of the employment as to which, as a matter of law, the plaintiff could not be permitted to recover. See Robinson v. Green, 3 Metc. (Mass.) 159; Nitedals & Co. v. Bruster, L. R. 1906, 2 Chan. Div. 671, 673. And, further, that in omitting to instruct the jury under the admitted facts in the case and as a matter of law the plaintiff could not be permitted to recover any compensation for furnishing *261working plans and specifications, nor for superintending the construction of the building, prejudicial and reversible error intervened.

The judgment of the Circuit Court must be reversed and a new trial granted, unless, indeed, the plaintiffs below shall within 20 days from filing mandate enter on the judgment in the Circuit Court a remittitur of $30,000, the amount of excessive recovery, in which case the judgment shall stand affirmed, the defendant in error to pay the costs of this court.

And it is so ordered and adjudged.