City of Louisville v. Muldoon

94 Ky. 462 | Ky. Ct. App. | 1893

JUDGE LEWIS

DELIVERED THE OPINION OF THE COURT.

' In 1883 T. P. Shanks, principál, and M. Muldoon and J. L. Smyser,. sureties, made a contract with, the •City of Louisville for reconstruction of Third street by laying an' asphalt pavement from Kentucky street to Shipp avenue, at a price per yard fixed, and payable upon monthly estimates during progress of the work, which was to be done according .to plans and .specifications of the city engineer, made part of the contract. One clause of the specifications is as follows: “Good and.sufficient.bonds to the City of Louisville, in a penal sum' equal to' the estimated amount of the" contract,, with sureties,, tq -be. approved by the mayor, will be required from all contractors, guaranteeing that their contract will be strictly and faithfully performed to the satisfaction of and acceptance by the mayor; and that the contractors will Tceep ■ neto pavements or other new worhs in repair for a term of five years from the date of the completion of their contracts, and from that date ten per centum of the cost of all neto worlc will be retained as an additional security and guarantee fund to Tceep the same in repair for said term; which said per centum will be invested in registered bonds of the United States, with interest thereon paid to said contractor.”

February 11,1890, M.. Muldoon, Theodore Harris and J. L. Smyser brought this action in equity against the City of Louisville, T. P. Shanks, the Barber Asphalt Company, and Louisville Banking Company.

It is stated in the petition that soon after the contract was made the firm of T. P. Shanks & Co. was formed, composed of Shanks, Muldoon and Smyser, for the purpose of carrying out the contract in question, Harris very soon becoming also a partner; and that August 11, 1883, the work of reconstructing said street was completed by the firm, accepted by the City of Louisville, and final estimate of the cost thereof made by the city engineer and paid...

It is further stated that prior to commencement of this action .the three .plaintiffs purchased the interest of T. P. Shanks, and thereby became equitable owners of the ten per centum retained by the City of Louisville.

In respect to the covenant of T. P. Shanks and his sureties, Muldoon and Smyser, to keep said street in repair for the period of five years from August 11, 1883, when the work of reconstruction was completed,, it" is stated that about 1887 the firm of T. P. Shanks & Co. sold its plant and machinery to the Barber Asphalt Company, which undertook and agreed to keep-in good order and repair the street for remainder of the term of five years, and to save the plaintiffs and Shanks harmless of damage arising from said covenant to the City of Louisville, and that the Barber-Asphalt Company at once took charge of that part-of Third street and its repairs, of which said city, through its chief engineer, was duly informed. An allegation in the petition that the Barber Asphalt Company did make some repairs on said street under direction of the city engineer and agents is followed by this statement: " But whether said Barber Asphalt Company did keep said pavement in good order and repair until the 21st day of August, 1889, as the said Shanks had been, by his contract, bound to do, plaintiffs do not know. It is either true that said Barber Asphalt Company did so heep the same in good order and repair or that it did not. Whether it did or not, plaintiffs do not Tcnow. If so Tcept in good order and repair, then plaintiffs are entitled to the whole retained percentage .with inierest; and if not, then plaintiffs are entitled to and ash judgment against said Barber Asphalt Company for any sum that said city may show itself entitled to longer retain of said percentage.”

In another part of the petition they pray judgment directly against the City of Louisville for amount of the several installments of interest that accrued on. the bonds mentioned, and interest on each installment, or equivalent thereof, in case the fund was not invested in bonds; also for nine thousand eight hundred and ninety-six dollars and fifty-six cents, being ten per cent, of the estimated cost of reconstructing the street, and interest thereon from March 1, 1889. The Barber Asphalt Company and the City of Louisville each filed a. general demurrer to the petition, which was overruled as to both. Thereupon the Barber Asphalt Company filed an answer alleging performance of its contract with T. P. Shanks & Co., and praying simply for dismissal of the action as to it. The City of Louisville filed its answer, in which it is averred that neither T. P. Shanks, the firm of T. P. Shanks & Co., the Barber Asphalt Company, nor any other person kept the street in good order and repair during the period mentioned, but that it was, a long time prior to August 20, 1889, allowed to fall into decay and ruin, and became almost impassable, so that it will require at least twelve thousand dollars to put it in that state of repair T. P. Shanks and his sureties covenanted to keep it in during said term of five years; and, making its answer a counter-claim against Muldoon and Smyser and cross-petition against Shanks, it prayed judgment for twelve thousand dollars in damages and dismissal of the petition. To that answer the plaintiffs replied merely that they did not know, or have sufficient information to form a belief, whether the street had been kept in good order and repair. But Shanks answered the cross-petition denying the allegations thereof. Afterward the City of Louisville moved for submission of the case to a' jury for trial, but the chancellor overruled that motion, and, on final hearing, rendered judgment against the City of Louisville for amount claimed in the petition, at the same time dismissing the counter-claim and cross-petition, and also the action as to the’ Barber Asphalt ■Company. No judgment was rendered for or against Louisville Banking Company, nor does it appear to have any interest in the case.

The first question we will considér is, whether facts sufficient to constitute a cause of action against the City of Louisville are stated in the petition.

Whether the street was reconstructed as required by the contract does not appear to have been put in issue by the answer of the City of Louisville filed, nor do we think it is now an open question, for as that work was completed and final estimate of cost made and paid without objection, it must be regarded as having been accepted.

But besides the agreement to reconstruct the street, Shanks and his sureties, Muldoon and Smyser, covenanted to keep it in repair for five years, and according to terms of the contract, the City of Louisville, had the right and did retain ten per cent, of the estimated cost of reconstruction, in the. language used, “ as an additional security and guarantee fund to keep the same «in repair for said term.”

That undertaking was made entirely distinct from the contract for reconstructing the street, which had necessarily to be completed and ended before the period of five years commenced. And it is clear a full, not partial, performance of it was intended by the parties to be a condition precedent of Shanks’ right to demand and recover the ten per centum at .the end of five years. Otherwise, retention of the fund by the City of Louisville for five years would have been without any use. or purpose whatever.

Such conditions in contracts about public works are not unusual or unreasonable; in fact, (hey are in most cases necessary to secure full and faithful performance by contractors of their undertakings. Here the City of Louisville was going to make the experiment of constructing an asphalt pavement, about which neither the city engineer nor contractor appear to have had any practical knowledge. The work was to. be very expensive, costing nearly one hundred thousand dollars, and in case the pavement .proved insufficient for the purpose intended, by reason of either defective construction or failure to keep it in repair, loss to the city would be great and possibly total. For, as shown by the evidence, if cracks and holes in such pavement are not immediately and effectively repaired, rapid disintegration and decay begins, and before long a great outlay will be required to restore the street to a state fit for use.

If then, as we think is unquestionable, the right to demand and recover the ten per centum was intended by the parties to depend upon Shanks having kept or caused kept the street in repair during the period mentioned, it results that an allegation that condition was performed would have been indispensable in order to constitute a cause of action therefor against the City of Louisville, he being the plaintiff.' And if so, we do not see by what process su.ch allegation by the plaintiffs in this case can be dispensed with. For the right to Shanks’ interest in the fund sued for was acquired ¡by them, subject to all the conditions prescribed in the contract. Indeed, two of them were parties to that contract, and the other being a member of the firm of T. P. Shanks & Co. had full notice of the nature of it.

It is not alleged by plaintiffs in their petition that condition was complied with by Shanks or any person for him. Nor do they, in their reply, deny the statement made by the City of Louisville in its .answer that he had failed to comply with it, their allegation being simply want of knowledge or sufficient information to form a -belief concerning that matter. But the presumption is they did know whether the street had been kept in repair, for it was the contract duty of two of them, and interest of the other, to have it done, and consequently their reply must be regarded a mere evasion not tolerated by the Civil Code.

Section 114 makes it the duty of the court, upon ■or without motion, to compel parties before trial to form a material issue concerning each cause of controversy, and for that purpose they, or the one in fault, may be required to reform his or their pleading. But we have the case here of plaintiffs recovering judgment against a defendant, without alleging in their petition existence of the material and only fact upon which their action can be maintained, and actually evading an issue concerning that fact when tendered in defendants’ answer. It is true Shanks denied he failed to keep the street in repair, but he is not a party plaintiff in this action, nor Las he any interest in the fund sued for, being merely defendant to the cross-petition, and interested in defeating recovery by the City of Louisville of damages in excess of the ten per centum.

It is, however, contended that the judgment of the chancellor, being supported by evidence bearing upon the main question, was authorized by subsection 4, section 113, Civil Code, which provides that “a party may allege alternatively the existence of one or another fact, if he states that one of them is true and that he does not know which of them is true.”

That section has no application to this case, because there are not here two facts upon one or other of which plaintiffs may alternatively base their right of action, but only one; that is, the fact that Shanks kept or caused kept the street in repair for five years from August 23, 1884, as he covenanted to do, and in order to maintain their action it is necessary for them to allege and prove that fact. But the petition does not contain such allegation; nor have plaintiffs really alleged alternatively or otherwise existence of any fact at all; but they simply say that “it is either a fact or not a fact that the Barber Asphalt Company kept the street in repair; whether it did or did not, they do not know.” And it was evidently their purpose to avoid stating whether the street was kept in repair, because if they had done so they would have been without a cause of action against either the Barber Asphalt Company or the City of Louisville. But there was no contract relation between the Barber Asphalt Company and the City of Louisville, and they were, therefore, improperly joined as defendants.

■ 2. If there had been an issue made by the pleadings concerning the fact of Shanks having kept the street in repair, it would have been the duty of the chancellor, upon motion, to transfer the action for trial by jury; but it has never been in a state for trial, except of the general demurrer, which was improperly overruled, much less for judgment in favor of the plaintiffs against the City of Louisville.

Eor the errors indicated the judgment is reversed, and cause remanded for proceedings consistent with this opinion.