The defendants claim recovery from the plaintiffs of the sum of $ 40,213.73 representing various items paid by the defendants for plaintiffs. The details of these items are set forth on pages 3,443 and 3,444 of the transcript of testimony. The Court concludes that the defendants are not entitled to recover $ 13,277.06 for building permits because the defendants have failed to prove that the amount expended for building permits was not within Article 2 of the General Conditions of the contract which provides, '* * * permits and licenses of a temporary nature necessary for the prosecuting of the work shall be secured and paid for by the contractor.' The testimony concerning these licenses does not establish to the Court's satisfaction that the licenses were in fact 'permanent building permits,' as referred to on page A-2 of the specifications. The Court, accordingly, finds for the defendants in the amount of $ 26,936.67.
The pre-trial order states several issues upon which the Court ruled during the course of the trial. The Court ruled that the defendants could not invoke the 'unclean hands doctrine' for the purpose of establishing in evidence facts relating to the agreements between the present plaintiffs and the O'Driscoll group relating to the acquisition of the real estate by the plaintiffs.
The Court ruled that the defendants did not at the time of the trial have sufficient status to enable them to offer testimony showing that the individual plaintiffs have improperly received loans, advances, payments, free or reduced rentals, or other benefits from any of the plaintiff corporations.
The Court also ruled that the defendants at the time of trial had no status entitling them to offer testimony charging waste or mismanagement to the plaintiffs.
The Court did, however, permit counsel representing the defendants to inspect the books and records of the plaintiff corporations and ruled upon questions as to the admissibility of such questions as arose during the course of the trial.
The testimony in the case disclosed that the plaintiff McFarland, on his own initiative, discontinued the practice of submitting corporate records to the defendant Shea for affixing of the corporate seal. The Court does not believe upon the evidence in the case that McFarland was legally justified in this action and finds that there was a breach of the terms of the December 18, 1953 agreement by McFarland.
The Court finds that the plaintiffs breached the terms of the Master Agreement and that plaintiffs breached the terms of the Supplemental Agreement.
The Court finds that plaintiff McFarland represented to the defendant McShain on a number of occasions that he had assurances that the Federal Housing Administration would guarantee loans of at least $ 17,000,000 for the construction of this project, and that on such representations McShain initially agreed to the construction undertaking.
The Court finds that the drawings and specifications referred to in paragraph one of the Master Agreement, dated December 18, 1953, were not completed at the time of the signing of this agreement, the evidence indicating that on December 18, 1953, the drawings and specifications for 4 groups of buildings were in varying stages of completion.
The Court has heretofore set forth other findings upon other issues of facts.
There is testimony in the case relating to a decorative fountain, the installation of which has never been completed. At the time of the trial, there was testimony indicating that the McShain organization was at that time taking some steps to complete this installation which has been delayed due to the inability of a quarry to furnish a stone slab, or slabs, in the proper size. The completion of this fountain is an obligation of the McShain organization which the contract requires to be completed.
Observations and Conclusion.
The Court in formulating its rulings upon this case has considered all of the evidence in the case relating to the individual items. This opinion, although lengthy because of the number of issues, does not purport to set forth all of the evidence considered by the Court upon individual items. Citation, or reference, to a specific exhibit or a specific item of testimony does not infer that the Court has used only this evidence in reaching its conclusion upon a particular point. Citations of documents and testimony are intended to be illustrative rather than comprehensive, because of the Court's desire to afford diligent counsel on both sides of this case an opportunity to know in general the items of evidence which have prompted the Court's rulings.
The exhibits in evidence in the case exceed 300 in number. The testimony of most of the more than 40 witnesses deals with a variety of controverted items. The Court in reaching its opinion upon these individual items has correlated the testimony of all of the witnesses relating to each item with the documents relating to that item.
The Court finds that the plaintiffs, by their obligations in this case, undertook to pay the defendants $ 18,000,000 for the construction of the project. The defendants have actually received from the Federal Housing Administration insured loans the sum of $ 15,745,691.50. There is thus owed upon the Master Contract to the defendants the sum of $ 2,254,308.50. There is to be added to this figure the amount of $ 26,936.67 representing the items paid by defendants for plaintiffs' account. The total thus owed to the defendants is $ 2,281,245.17.
Against this obligation, the plaintiffs are entitled to the following credits:
1. Interest expenses for mortgage dis-
count payments $13,050.00
2. Amount of E. C. Ernst claim, plus
3. Amount of Arbitrator's award 184,695.00
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