THE SOUTHWESTERN REPORTER VOLUME 238 KAUCHER, HODGES & CO. et al. v. BUCK- Rehearing Denied March 20, 1922.) 1. Guaranty 36(7)-Contractors' guaranty of cost of building held inapplicable to increase in cost by increase in cost of labor. Contractors' guaranty that cost of construction would not exceed estimated sum, expressly stipulating that the guaranty was "made during existing conditions and does not apply should the work be interfered with or cost increased by any act of government or any unforeseen elements, or acts of God," held not a guaranty against the increased cost of the building caused by an increase in the cost of labor after the contract was entered into and before the building was completed. ers. From that part of the decree rendered adverse to them, the defendants appeal, and plaintiff cross-appeals. Affirmed on original appeal and cross-appeal. W. M. Hall, of Memphis, Tenn., and Rose, Hemingway, Cantrell & Loughborough, of Little Rock, for appellants. Cockrill & Armistead and John W. Newman, all of Little Rock, for appellee. McCULLOCH, C. J. Appellants are building contractors, and in March, 1918, entered into a written contract with appellee for the construction of a reinforced concrete building near the city of Little Rock. They agreed with appellee to "furnish the detailed plans, the building equipment, and superintend the erection of the building for a compensation equal to 8 per cent. of the actual construction cost." Appellee was, under the contract, to furnish and pay for all material and labor. Under contract entitling contractor to a Appellants' estimate of the cost of the buildspecified price per cubic yard in case addi-ing, including their own compensation, was tional concrete was needed, the specified price did not include the cost of the forms, in view of other specifications for "forms," and in view of the impossibility of knowing in advance the number or kind of forms that would be called for. 2. Contracts ~231(1)—Stipulation as to price per cubic yard of extra concrete needed held not to include the cost of the forms. 3. Guaranty 36(7)—Guaranty against increase in cost of construction made inapplicable to increase in cost of labor held a guaranty against increase caused by inefficiency of labor. the sum of $76,463, and in the contract appellants gave a guaranty that the cost would not exceed that sum, but the guaranty was qualified by a clause in the contract as follows: "It is further understood that this guaranty is made during existing conditions and does not apply should the work be interfered with or cost increased by any act of government or any unforeseen elements or acts of God." Appellants gave a bond, executed by a surety company, which contained the follow Contractor's guaranty of the cost of construction of building made inapplicable to increase in cost of construction caused by increase in the cost of labor rendered contrac-ing clause: tors liable for the additional cost caused by inefficiency of labor, notwithstanding the increase in the cost of labor, since the increase in the cost of construction caused by the increase in the cost of labor did not completely displace the guaranty, but merely made it inapplicable to the increase in the estimated cost in so far as the increase was caused by the increase in the cost of labor. "Fifth. It is hereby understood and agreed that this bond is executed by the surety and accepted by the obligee with the understanding that the contract which it guarantees is made in contemplation of the existing conditions as to the cost of labor, material, equipment, and supplies, and the cost of transportation, and the total cost of $76,463.00 named in said contract shall not apply, but shall be increased proportionately to the increased cost of com Appeal from Pulaski Chancery Court; pleting the contract in the event of an increase John E. Martineau, Chancellor. Action by the Buckeye Cotton Oil Company against Kaucher, Hodges & Co. and oth in the cost of labor, material, equipment, sup- For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes unforeseen elements, or act of God, or for any other reason for which the principal is not responsible." the percentages referred to for compensation and overhead expenses, but charged appellants with the sum of $11,076.38, increased There was a provision in the contract for cost that appellants contended was caused by extra work as follows: "Miscellaneous: In case additional excavation work and concrete is needed, unit prices on same to the owner to be as follows: "Excavation at 75¢ per cubic yard. "Concrete at 30¢ per cubic yard." The building was completed in accordance with the terms of the contract, but the cost thereof was more than $20,000 in excess of the amount guaranteed by appellants, in addition to the cost of added work falling within the specification for extras. Appellee instituted this action against appellants and the surety on their bond to recover the additional cost of the building over the amount of the guaranteed cost, and appellants defend on the ground that the increased cost resulted from changed conditions with respect to prices of material and labor and inefficiency of labor. There is also a disputed item in the account between the parties with respect to the cost of furnishing "forms" for extra concrete. This item amounted to $3,827.97, and it is the contention of appellants that this was not included within the unit price of 30 cents per cubic yard as specified in the contract. The contention of appellee is that the specified price for concrete was intended to include the cost of the "forms," and that that clause of the specification should be construed to mean the price of concrete in place. inefficiency of labor, and rendered a decree against appellants for that sum on its contract of guaranty. The court allowed appellants a credit for the sum claimed as the cost of furnishing "forms" for the concrete. Appellants prosecuted their appeal from that part of the decree adverse to them, and appellee has cross-appealed. [1] There was evidence adduced which supports the finding of the court that the aggreof counsel was expended for increased cost gate amount mentioned in the stipulation of labor. The contract provides that the guaranty "is made during existing conditions and does not apply should the work be interfered with or cost increased by any act of government or any unforeseen elements or acts of God." Counsel for appellee contend that according to the proof the cost of labor was not increased by the act of government in pursuing its war preparations in and about Little Rock, but the answer to this contention that the exception is not based entirely on interferences or increases by "act of government," but it provides that the guaranty does not apply to changed conditions "from any unforeseen elements," and the proof is abundant that there was a change of conditions with respect to the cost of labor, both skilled and unskilled, after the contract was entered into and before the building was completed. .We are of the opin to this increased cost the percentages specified for compensation to the contractors and overhead expenses. The contract provided for the payment of these percentages, and this applied to the percentages of such part of the increased cost as did not fall within the scope of appellant's guaranty. The action was instituted in the circuition also that the court was correct in adding court of Pulaski county, and by consent of parties was transferred to the chancery court and proceeded there to a final decree. After the testimony was introduced, the parties entered into a written stipulation in which it was agreed that the aggregate of the items of increase of the cost of labor claimed by appellants in the construction of the building amounted to $7,032.16, and that the cost of furnishing "forms" for extra concrete work, including labor and material, was the sum of $3,827.97, as stated in appellants' account. Appellants claim that to the item of increased cost of labor there should be added the regular commission of 8 per cent. specified in the contract and also the 11.70 per cent. commission to cover overhead expense, but appellee disputed the right of appellants to include these percentages in the increased estimate of cost. The stipulation was, further, that if the court allowed those claims of appellants, but disallowed their claim for increased cost alleged to be due on account of inefficiency of labor, the amount of the decree in favor of appellee should be $11,076.38. The court in its final decree refused to charge appellants with the items of increased cost of labor as set forth in the stipulation, including [2] We are also of the opinion that the court was correct in allowing appellants credit for the cost of furnishing the "forms" for the extra concrete. This part of the contract appears in the specifications, which also contains a specification for the concrete work called for in the plans. There was a separate specification for "concrete work" and for "forms." One specification provided how the concrete should be mixed and the kind of cement to be used and the kind of sand and rock. The other specification provided how the forms should be constructed and where the lumber therefor should be delivered. The specification for extra concrete work must be read in the light of these separate specifications, and when this is done it seems clear that it was not intended to include the cost of making the "forms" in the specified unit price for extra concrete. More over, the cost of making the forms amounts |