PRESCOTT, J., delivered the opinion of the Court.
The defendant owner of a shopping center has appealed from a decree against him, which enforced a mechanics' lien filed by the plaintiff contractor. The chancellor summed up the facts as follows:
"This is a suit to enforce a mechanics' lien filed on February 26, 1958, by the plaintiffs, general contractors, against the defendant owners for labor and materials furnished in the erection of a shopping center addition located in Oxon Hill Election District. The plaintiffs' claim consists of the new contract price amounting to $1,055,591.68 plus various items claimed as extras, giving a total of $1,083,000.86, less payments of $902,029.96, leaving a balance of claim amounting to $180,970.90. In their answer, as amended, to the bill of complaint defendants have claimed set-offs by way of recoupment, totaling $161,090.69, and also ask that they be allowed to deduct $33,972.88, representing mechanics' liens filed by sub-contractors who supplied labor and materials to the plaintiffs on this project.
"The transcript of testimony contains 419 pages and approximately 100 exhibits presented by both sides. In deciding the case it therefore becomes necessary to summarize the facts as briefly as practicable, and take up separately the claims of the respective parties.
"Mr. A. Lloyd Goode has for many years been engaged in real estate development, particularly with reference to shopping centers. The defendants were organized in connection with developing what is generally known as the Eastover Shopping Center. In 1955 Mr. Goode completed the larger portion of the project on a portion of the property here involved, located on the Indian Head Highway, near the District Line. Being experienced in the building business he himself completed the first portion of the project and did not build it through a contractor. The original portion of the shopping center, as well as the addition, was constructed upon filled ground, and testimony shows that considerable difficulty was experienced because of the seepage of water into
"During the latter part of 1955 or early months of 1956 Mr. Goode determined to build the extension in this case. This portion of the development was to be constructed over a low lying area in which fill dirt had been deposited, making allowance for a basement, which ultimately became the site of the C-3, or J.C. Penny store. At first he intended to build the extension and in preparation for that ordered the necessary structural steel from Dietrich Brothers, steel fabricators, in Baltimore. Dietrich accepted his order provided achitectural plans could be placed in his hands by June 1, 1956, and promised to deliver the steel about November, 1956, but did not guarantee delivery, steel then being in short supply due to a recent steel strike. The architectural drawings were not sent to Dietrich by June 1, but some of them were forwarded later in June. Goode then changed his order with Dietrich to a steel tonnage basis. Because of ill health he decided to seek bids from contractors for the construction of the extension rather than build it himself, based upon plans and specifications and other documents and addenda prepared by Louis H. Asbury and Associates, Architects. The invitations for bids produced the one submitted by the plaintiffs, which resulted in the contract between the parties, dated August 29, 1956. The bid or proposal submitted by the plaintiffs recited that the `undersigned bidder having carefully examined the plans, specifications, and other documents and addenda, visited the site and being familiar with all requirements of the site.'
"Embodied in the contract upon which the bid was submitted were included the general conditions of the contract, specifications, and drawings. The specifications contained Addendum No. 1, which states that:
There was no stipulation as to liquidated damages, if any.
"The general conditions of the contract, in Article 18 dealing with delays and extension of time, states that:
I
After the appellees' bid had been received and examined, the owners signed and forwarded, in accordance with the specifications, a formal written agreement, dated August 29, 1956, for execution by the appellees. This instrument is called a "contract proposal" by the appellees, who claim that it contained provisions not suggested or included in the invitation to bid or the appellees' bid proposal. The bond that the appellees were required to furnish was obtained on September 12, and thereafter, on September 19, two copies of
A dispute arose in the trial below as to whether August 29, 1956, the date named in the written agreement, or September 19, 1956, the date when it was executed by the appellees, should prevail in computing the starting date for the 330-day period. The chancellor concluded that under the authority of District of Columbia v. Camden Iron Works, 181 U.S. 453, 461,
The application of a few fundamental principles of contract law will solve the problem. It is universally held that a manifestation of mutual assent is an essential prerequisite to the creation or formation of a contract. It is likewise universally agreed that it is possible for parties to enter into a binding informal or oral agreement to execute a written contract; and, if the parties contemplate that an agreement between them shall be reduced to writing before it shall become binding and complete, there is no contract until the writing is signed. And the intention of the parties in this respect must be determined by the facts and circumstances in each particular case. Peoples Drug Stores v. Fenton, 191 Md. 489,
The chancellor, by his above ruling, in effect held that the parties contemplated that their agreement would be reduced to writing before it would become binding; that the appellees, before September 19, 1956, had not manifested their assent to the final formation of a contract and were, therefore, at liberty to withdraw from the negotiations prior to such manifestation, Peoples Drug Stores v. Fenton, supra, 191 Md. at page 494; that the parties did not agree to commence work "immediately" as of August 29, 1956 (as contended by the appellants) when they, at that time, had not finally and conclusively agreed upon the contract; that the language which states the "work performed under this contract shall be commenced immediately" is ambiguous when the starting time is not certain, hence the parol evidence was admissible; and that the parties intended this language to apply to September 19, 1956, the date when the agreement was finally executed by the appellees and delivered to the appellants.
We think the parol evidence was admissible for the purpose offered; and we are unable to say that any of the above findings of fact were clearly erroneous. Maryland Rule 886.
The appellants cited five out-of-state and federal cases which they claim support their side of the point being here considered. Due to the difference of the language used and the attendant circumstances, we think all of them are distinguishable. It would unduly prolong this opinion, which
II
The court below found that the contractor was entitled to an extension of time of 145 days under the provisions of Addendum No. 1 and Article 18, set forth above, because of a delay in the delivery of structural steel, holding that such delay was a cause "beyond the contractor's control." The appellants assign no less than four reasons as to why this was error: (a) Conditions in the steel industry resulting from a prior strike, which were well known to the contractors at the time of their bid, cannot be construed to be a condition beyond its control under Article 18; (b) the maximum extension of time that could be granted under Article 18 — assuming appellants' argument to be wrong under (a) — is thirty-five days, being the maximum length of time the progress of the work was delayed; (c) the court below erred in failing to find the contractors were responsible for a part of the delay in the delivery of the structural steel; and (d) the contractor was not entitled to any extension of time under Article 18, as it did not comply with the notice provision thereof.
(a)
The appellants contend that the chancellor erred in allowing the contractors credit for any delay due to a shortage of steel caused by a previous strike in the steel industry. They argue the contractors undertook an unconditional obligation under the contract "to substantially complete" the project in 330 days; that under the circumstances surrounding the making of the agreement, it was reasonable to assume that the contractors guarded against the uncertainty of delivery of the structural steel by making an allowance for such delay in computing the time for the substantial completion of the work, and they cite the cases of State, to Use of Lane v. Dashiell, 195 Md. 677, 689-690, 75 A.2d 348, Link Belt Engineering Co. v. United States, 142 F. 243 (E.D. Pa., 1905), and Maxwell
(b) and (c)
We think the trial court properly disposed of these questions in the following manner:
(d)
When we arrive at this point, the appellants present their last argument on the question under consideration. They claim the evidence shows conclusively that no written claim requesting an extension of time because of delay was submitted to the architect or the owners within the time required by Article 18; and assert delay in structural steel relied upon was for the 145-day period between December 1, 1956, and April 24, 1957, and, since the request for an extension was not submitted until May 16, 1957, it was too late to be effective. There is little doubt that when properly relied upon and properly presented, the courts have required strict compliance with provisions of this nature. Olson Construction Co. v. Commercial Building & Investment Co., 256 N.W. 22 (Nebr., 1934).
However, we think the appellants waived such compliance in the case at bar. They admit in their brief that "structural steel was in critical supply during that period because of a strike in the steel industry," and "the difficulties encountered in obtaining structural steel were generally known throughout the construction industry at this time." They also knew that Dietrich had not been furnished the architectural drawings
There is nothing new or novel in waiver by conduct, writings and pleading or failing to plead. There has never been a comprehensive and fully satisfactory definition of waiver, but it is safe to say that estoppel is not an essential element of waiver in Maryland and waiver may take place after the time for filing notice or proof of loss in insurance cases. McElroy v. John Hancock Mut. Life Ins. Co., 88 Md. 137, 149-151, 41 A. 112; Fidelity & Casualty Co. v. Riley, 168 Md. 430, 438, 439, 178 A. 250, and cases therein cited. It is unnecessary to formulate or state any precise rule on the subject that would apply to all cases and under all circumstances, and we need not discuss it at length; since this Court, through Judge Hammond, has recently had occasion to go into the matter quite thoroughly in the case of Foard v. Snider, 205 Md. 435, 446-451, 109 A.2d 101. There, the question arose as to whether an option to purchase a farm and personal property had been exercised seasonably or in proper form by a letter from the optionee to the optionor. In holding that the optionors had waived any such possible defenses, the Court said:
Without further elaboration, we think the facts set out above bring this case well within the ruling of the Foard case; and, as stated above, the appellants have waived the right to rely upon the failure to make the request for an extension of time due to delay within the period provided in Article 18.
The chancellor found that the shopping center had been substantially completed by the appellees on December 28, 1957. The appellants claim that it was not so completed until January 28, 1958, and the court was clearly erroneous (Rule 886 a) in this ruling. The ruling, of course, involved essentially a question of fact. We have carefully examined the evidence, and we do not conclude that the chancellor was clearly wrong in his holding.
IV
The chancellor made an allowance to the appellees for excessive costs incurred by them for undisclosed, unusual sub-surface conditions, plus a 10% profit allowance thereon. He assigned two reasons for doing so: (1) A provision of Article 15 of the general conditions of the contract which states that "[s]hould conditions encountered below the surface of the ground be at variance with the conditions indicated by the drawings and specifications the contract sum shall be equitably adjusted upon claim by either party made within a reasonable time after the first observance of the conditions"; and (2) that the appellants knew of the unusual sub-surface conditions and failed to disclose the same to the appellees. The appellants argue that the finding of the chancellor as to the location of the sub-surface water table was clearly erroneous, that even if not clearly erroneous it was not a condition at variance with conditions indicated on the plans and specifications, that the evidence does not support the finding of the chancellor that the owners knew the location of the water table and under no circumstances should the contractor be allowed the 10% profit on the extra work. We agree with the chancellor. While there was some evidence to the contrary, there was ample testimony to support his finding on the location of the water table. The witness Hutchinson, a graduate of Carnegie Institute of Technology of Pittsburgh with a B.S. degree in physics, testified he had studied the science of hydraulics; that as a superintendent on the subject construction he observed the water rising in the excavations; that based upon his knowledge of hydraulics and his experience
The appellants further argue that the case of Cowan, Inc. v. Meyer, 125 Md. 450, 465-468, 94 A. 18, should control the
Turning now to the second ground assigned by the chancellor for his ruling on the contention now being considered, the Supreme Court of Michigan in the case of Valentini v. City of Adrian, 79 N.W.2d 885 (1956), in a carefully written, well reasoned opinion held that a contractor could recover for excessive costs in the construction of a sewer due to subsoil quicksand and excessive water conditions, known to the defendant city but not disclosed to the contractor. During the course of its opinion, the Court stated at page 887:
As stated above, we find no error in the chancellor making an allowance to the appellees for the excessive costs due to the unusual sub-surface conditions mentioned above.
V
The chancellor made the appellees allowances for eight specific items as extras under the contract at the specified rate for change orders of cost plus 10% profit allowance. The
VI
Under this heading, the appellants claim they were entitled to recoup $450.15 that they paid to a waterproofing company for stopping leaks in the basement of one of the stores, and the sum of $236.00, which was the amount of a premium paid by them to bond off a mechanics' lien filed by subcontractors and suppliers. It has been seen above that much of the work was performed in very close proximity to, and some actually partially below, the water table. During the course of construction, the owners, in an apparent effort to insure a dry basement, modified the contract by Change Order No. I, which provided for the inclusion of an integral waterproofing material in the cement in lieu of the contract provision for pargeting. The appellees did not warrant the specifications in regard to waterproofing. The appellants did not establish a failure to comply with the specifications, nor did they show any lack of skill or workmanship on the part of the appellees, but state, "the contractor was required under its contract to provide the owners with a basement free from leaks." They fail, however, to point out in the contract such obligation on the part of the appellees; hence, in the absence of a showing of failure to comply with the specifications or of lack of skill or care, we think the chancellor was correct in his ruling. Gaybis v. Palm, 201 Md. 78, 93 A.2d 269.
VII
In their seventh contention, the appellants claim error in several of the chancellor's rulings on evidence. We shall not discuss them in detail. If we assume, without deciding, that the chancellor were in error, as contended by the appellants, the rulings would not change the result reached herein; consequently, there could be no reversible error involved.
VIII
The chancellor allowed the appellees interest on their claim from December 28, 1957, the date when the shopping center was substantially completed. In this, he was in error. Under the previous decisions of this Court interest should have been allowed only from the date of the filing of the mechanics' lien for record, which was February 26, 1958. Hensel v. Johnson, 94 Md. 729, 737, 51 A. 575; T. Dan Kolker, Inc. v. Shure, 209 Md. 290, 303, 121 A.2d 223. The decree will, therefore, be modified accordingly, and, as modified, affirmed.
Decree modified so as to allow the appellees interest from February 26, 1958, and, as modified, affirmed, the appellants to pay the costs.
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