Barker v. Troy & Rutland Railroad

27 Vt. 766

• Court: Supreme Court of Vermont
• Decided: April 15, 1855
• Status: Published

Opinion

The opinion of the court was delivered, at the circuit session in September, by

Redfield, Ch. J.

I. One. question, lying at the foundation of the action, is whether a recovery can be had without showing performance, according to the terms of the contract. At common law, and by the law of New York, where this contract was made, and to be performed, the plaintiff cannot recover, upon an entire contract for labor, if he voluntarily abandon the performance, however much he may have done under the contract. Nor can he recover upon the contract, in such case, for part performance, unless hindred from proceeding by the act of the other party. Even the act of God will not excuse the performance of such a condition. And if the time of performance is extended,' the original contract being under seal, the extension must also be under seal, to enable the party to recover upon the contract, after full performance, according to the enlarged time. Porter v. Stewart, 2 Aiken’s R. 417. But if the time be enlarged in which to perform the contract, by consent of the parties, but by parol, the recovery may be had in assumpsit. Sherwin et al v. Rut. & Bur. Railroad Co., 24 Vt. R. 347. That is the form of the present action, we suppose, although the writ is not copied. The party might, in such case be entitled to recover, by way of recoupment, any damages sustained by the enlargement of the time of performance, unless the contract of enlargement, or the circumstances under which it was made, carried with them an implied waiver of all claim on that account. This, we.think, must be regarded as disposing of all question as to the right to recover, ’at least a reasonable compensation, for what was done towards performance of the contract. And, in such cases, the original contract is regarded as forming the basis of the renewed or enlarged contract, unless it is expressly waived, or the work is agreed to be done upon so different a plan that the application of the original contract cannot be traced, which does not seem to have been the case here. There seems no good ground to question the sufficiency of the facts reported by the referees, in the present case, to show consent on the part of defendants to the performance of the contract, after the time limited by its terms.

II. But a question is made whether a recovery can be had before a full performance, according to tbe enlarged terms, inasmuch as there is no pretence that the defendant expected to accept of anything less than full performance, at some time, and the referees find a deficiency of $1,800, and more, and the ex parte award of Broadhead shows more than twice that deficiency. We think there are many reasons why this should not prevent a recovery.

1. The building of the fence, according to the instruction of Fuller, the only man the defendants employed to sujserintend its construction, and, according to the plan furnished by defendants engineers, and especially when it is considered that this was so done by sub-contractors, under plaintiffs, who have been paid by plaintiffs for the work, must, in every view, be an effectual estoppel upon defendants as to all claims for damages on account of any deficiency in the construction.

2. The other deficiency, we think, should be measured by the finding of the referees. Broadhead does not seem to have been in any sense chief engineer after the expiration of his employment for six months. The contract was to build the road to the satisfaction and acceptance of the defendant’s engineer. This final acceptance must, no doubt, refer to the chief engineer, and so the defendants seem to have viewed the matter, by sending to Wisconsin to procure Broadhead to pass upon that question. But, it seems to us that, strictly speaking, the defendants had no such officer at the time the plaintiffs left the work, claiming they had finished it. For, although for many purposes, the resident engineer is to perform the subordinate offices of making estimates and plans from time to time, of necessity, as held in Herrick’s case; yet the final acceptance of an entire road, could scarcely be understood as referable to any other than the chief engineer. And so the defendants viewed the case. But as they had no such officer, it must, of necessity, excuse the obtaining an award of acceptance before demanding pay.

8. The acts of the defendant and their lessees, (which for many purposes must be regarded as theirs,) seem to amount to a sufficient acceptance of the work, as far as it was done. After having leased the road, and commenced running it, all that could be claimed by defendants would be a deduction from plaintiff’s claim, on account of any deficiency in the work, which the referees allowed. This point is expressly decided upon great consideration in a case so precisely similar to the present as to admit of no substantial distinction. Danville Bridge Co. v. Pomeroy, 15 Penn. St. R. 151. The same thing, in principle, has been virtually decided in this state in numerous cases. Booth v. Tyson, 15 Vt. R. 515, and, cases there referred to.

The form of the action, if any action will lie, which could be substituted for the present, by any amendment, in the power of the court, is not material, after a reference of the case, upon its merits, saving only a condition, that the referees shall dispose of the case, according to law, which is understood to refer only to questions arising upon the merits. Hicks v. Cottrill, 25 Vt. R. 80. Spaulding v. Warren, 25 Vt. 316, and cases there referred to.

IY. The claim for side-track, although one of some doubt, and of very considerable amount, we have not been able to find good ground for allowing. The testimony, as to what was said by either of the parties, at the time of entering into the contract, could not properly be received, to fix the construction of the contract, unless it were to define which of the two or more significations, the parties intended to attach to a strictly ambiguous or equivocal term. No such term is found in the present contract, which the testimony determines. The contract is to build a portion of defendant’s railroad between certain points. Here is nothing equivocal, and to admit the declaration of the parties made at the time, is to add to the written contract.

The subsequent acts of the parties, in the execution of the contract are not liable to any such objection, and have always been admitted, to show how the parties understood their contract, and as a practical construction of it. And the fact that the plaintiffs made no claim for this side-track, amounting to more than $10,000 during the whole progress of the work, while they were receiving monthly payments, according to the estimates of the engineers, is very conclusive evidence to show how the plaintiffs viewed the matter at the time.

Ye think, too, that the fair construction of the contract itself is to build the road for so much, by the mile. This can import nothing less than by the mile of road. Not a mile of track, but a mile of road. And a mile of road is no more because it has more or less of additional side-track at stations and turn-outs. And it is expressly stipulated, in the contract, that the plaintiffs shall build the side-tracks and turn-outs, &c. at stations. If the contract had provided for double track, it would scarcely have been claimed that the plaintiffs could have demanded double the stipulated price per mile. But the principle seems to be very much the same in ' regard to this side-track, which is stipulated for, but the whole road to be paid for by the mile. Unless, then, this side-track adds to the length of the road, it cannot fairly be measured in estimating the sum due plaintiffs, as it seems to us. If the plaintiffs had stipulated for pay for every mile of track, they would, no doubt, have been fairly entitled to measure the side-track and turn-outs. But I find no such stipulation, and I cannot convince myself that the side-track can fairly be said to add to the length of a railroad.

Y. The claims for the extra work in this case are so precisely similar in principle, and in their leading facts, to those made in Thayer v. Vermont Central Railroad, 24 Vt. 440 and Herrick v. Same, ante 673, that we deem it needless to occupy time. They arc expressly excluded by the very terms of the written contract. And there is not the slightest reason to believe that either party supposed any such claims were to be made on either side, as the work progressed. This should be always regarded as a sufficient quietus to all such claims in any case, and especially in cases of this character.

YI. The claim for interest paid stockholders, and for the failure to recover interest upon instalments due the corporation until the work was completed, which is the same thing in a different form of stating the same proposition, made by defendants, is quite too remote a damage to be fairly taken into the account, in estimating the precise damages sustained by defendants, as it seems to me. Or, to express myself more explicitly, it does not seem to be any damage at all. The first is merely paying interest upon money paid in by stockholders, and which being on hand, may be supposed to produce the same interest, unless defendants are compellable to pay it out to plaintiffs for construction.

Now, so far as the money had been so paid out, before the enlargement of the time of building, it was done according to the terms of the contract, and was known to the defendants at the time they consented to give further time to plaintiffs, and, therefore, any such claim as interest upon what they have already paid must he regarded as waived by the very extension of time. And the portion of money not yet due plaintiffs might be kept on interest until earned by them.

But what seems more conclusive to me than any other view, in regard to this claim, is, that it is a payment by defendants to themselves virtually, merely taking money out of one pocket and putting it into another. The corporation and the stockholders, in legal contemplation, are not identical, but in any equitable view they are the same. The interest of all the stockholders and of the corporation are, of necessity, identical. Paying interest to the stockholders is, therefore, merely lessening the stock unless it is earned, and as the plaintiffs held a large amount of this stock and received no interest, it was really lessening their stock. But if they have any counter claim on this account, or any claim for interest under the bye-laws, it cannot he made in this action. If the defendants have any claim for damage by reason of not having their road by the time stipulated, it must be on account of not being able to use it as soon as they otherwise might, and thus have secured rent or use. But it would seem from the report that the connecting roads were not so finished, that this road could be used to any purpose, if it had been finished earlier, and that no loss was sustained on that ground.

VII. The claim for money due for right of way was properly enough allowed, as the defendants are clearly liable for it, and if plaintiffs are also, by contract, and should hereafter be compelled to pay, they might recover the sum paid of defendants, as money paid for their use, the plaintiffs, thereafter, if liable at all, being merely sureties for defendants, as defendants had been to them before this allowance. The allowance will merely change the relation of the parties in that respect. And, as, by their contract, the plaintiffs were bound to have paid this money, we do not perceive that they have any just ground of complaint that the money is now allowed to be retained by defendants to exonerate themselves by paying it over instead of trusting to plaintiffs doing it.

VIII. The only remaining question arises in regard to the stipillation, in the contract, to accept a portion of the price of the work in the stock of the defendant’s company, which was worth only 33 per cent, at the time the work was finished. It seems to us the most difficult question in the case. And, with me, the greatest difficulty has been to determine whether the stock has become so due, either by lapse of time or a demand of payment, as really to amount to a sufficient refusal or omission to pay, to convert the claim into money. For if the defendants, upon reasonable request, have declined paying the amount due in their stock, as stipulated, it would seem but reasonable they should pay the amount in money.

1. This is the general rule in regard to contracts payable in collateral articles, estimated in currency, and not delivered.

2. The stock of a corporation is but a certificate of such a sum being due the bearer. And where the party stipulates to pay in his own paper, if he refuse, suit may be brought immediately, although the paper was to have been on time, if given. But it was never supposed the party could reduce the money by showing his paper depreciated in the market. This would be virtually giving the difference to the other stockholders. This would be the rule which should be applied if defendants are wilfully in fault. If it were the stock of another company, no doubt, all which could be recovered is the value of the stock in the market. Certainly, this is the general rule, in regard to stock. And, peirhaps, that rule should be applied to the stock of the defendants, if it appears they have not willfully and unreasonably refused to deliver the stock.

The case of Boody v. Rutland § Burlington Railroad Co. throws no considerable light upon the question, inasmuch as the referees in that case adopt the market price of the stock, to which the defendants did not object if liable at all to a money judgment for the stock, which they resisted, and which the court regarded as doubtful, but expressly declined to decide, because there did not enough appear in the report to show that the referees were wrong, thus leaving it finally to rest upon the decision of the referees, which is not objected to, as to the rule of estimating the value of the stock, but only as to the right to include that, in their judgment.

But the recovery here is not allowed upon strictly legal grounds, upon the strict and literal performance of the contract on the part of the plaintiffs. It is rather upon equitable grounds that any recovery and apportionment of the contract is allowed for anything less than full performance. By the terms of the contract the defendants had a right to retain the tenth part reserved until full performance. And, although it has not been regarded as a strict condition precedent in some of the cases, Danville Bridge Co. v. Pomeroy, 15 Penn. 151, still it is a stipulation in the contract for the full performance of which the defendants had the right to insist, and for doing which they are not to be themselves regarded as in fault. The defendants, too, were justified in refusing to pay any deficiency in the work at the time of the demand, so that while we excuse the plaintiffs from full performance of their contract, as a strict condition precedent, and allow them to recover to the extent of what they had done, on the equitable ground, that they had in good faith attempted to fulfil their undertaking, and supposed they had done so, and only failed by mistake and misapprehension, which should not, under the contract, defeat the recovery in loto, but only subject to an equitable deduction for all damage sustained by defendants, it seems to us that it should form a part of this equity to the defendants not to be required to pay more for this stock even if it were their own than it was in fact worth, or could have been made to benefit the defendants.

As we now hold, the plaintiffs were, at the time of' the demand, entitled to recover, upon equitable grounds, a sum less than the whole price. But they demanded the whole price, and the defendants refused. The demand itself was unreasonable. Is it certain a reasonable one would have met a similar fate ? It has been held the demand must be reasonable to render the refusal unreasonable. Jameson v. Ware, 6 Vt. R. 610; As, therefore, the refusal of defendants seems to have been not altogether without good excuse, and in allowing an equitable recovery, in a case like the present, one of the first requirements seems to be, that no injustice shall be thereby visited upon defendants, it would almost necessarily follow that we should not suffer the plaintiffs to recover more for the work really done by them than they could possibly have realized, if they had been paid at the time, according to the contract. And, as we set up a basis of recovery upon equitable grounds, and one not contemplated in the contract, we should not visit the defendants with a judgment which will make them worse off than if they had been allowed to pay the sum found to be due upon this equitable basis, after it is declared, according to the stipulations of the original contract. If this view is sound and equitable, and we see no reason to doubt it, the plaintiffs, as to the stock portion of their judgment, are entitled to the highest price the stock bore after the suit was commenced, and before the final judgment, or, if they choose, the court will strike out that portion of the amount reported, and require the certificates of stock still to be delivered, and if defendants refuse on reasonable request, enter up judgment for the full amount.

*

Judgment reversed, and judgment to he entered, estimating the stock at 33 per cent, unless the plaintiffs choose the other alternative.

The Rutland and Washington Railroad Company, summoned as the trustees of the defendants in the above cause, having effects in their hands, the plaintiffs in interest, for the purpose of securing them, under any view which might he taken as to the proper persons to he made the nominal plaintiffs, caused two other suits to he commenced against the same defendants in each of which the said Rutland and Washington Railroad Company were summoned as trustees — one of the suits being in the name of the first assignees^ Baker & Hoes, and the other in the name of the second assignee Benjamin W. Walldey. The declaration in each of the suits was the same in form and in the amount claimed. All of the suits were entered and referred at the same time to the same referees, before whom but one hearing was had, which was intended to have reference to either or such of the cases as the legal rights of the respective parties rendered appropriate. The referees reported in the two cases last named, only by referring to their report in the first case. In rendering judgment for the plaintiffs in the above case, the county court rendered judgment for the defendants in each of the other cases, to which the plaintiffs excepted, but abandoned them upon a final recovery in the supreme court in the first case. In the taxation of costs,' the defendants claimed that they should be allowed to tax a proportion of the costs in each suit in their favor, including one-third of the expense of the testimony, both by means of depositions and witnesses.

By tiib Court, (at the November Term, 1855.) We have had similar cases before the court in other counties. As these suits, which are now abandoned, were brought merely to save the plaintiff’s in case of some exigency in regard to testimony or the ruling of the law, not anticipated, but always possible to occur, and have been kept along for similar reasons; we hold that all the expense of the trial which was or could be made available in the principal case in which the trial and recovery was had shall be taxed in that case. In the other cases the defendants will tax, of course, court and clerks’ fees paid out, term fees, attorney fees and travel and such other costs as apply exclusively to those cases, as where depositions were taken exclusively for those cases, probably.

[The following decisions upon questions of practice, which were made by the supreme court during their last circuit, have been furnished to the reporter by one of the judges, and are here inserted in advance of the volume in which the other decisions of that circuit will be published.]

Note. — In regard to the right of the defendants to now pay the stock, or its equivalent in value, and not to be compelled to pay its nominal value, it must in equity, as it seems to us, (and this case is now to be disposed of upon strictly equitable grounds, as far as the amount of recovery is concerned,) depend altogether upon the previous question, whether they have been in fault in not delivering the certificates of stock.

1. The time for full delivery, i. e., the full completion of the work, has not yet arrived.

2. By the terms of the contract, they had the right to retain ono-tenth of the price until full performance.

3. Then at the time the demand of full payment was made, they were justified in refusing to comply with it, by the amount of actual deficiency, §1893, and something above §35,000 on account of the one-tenth. All this would justify a refusal to deliver stock to the amount of nearly §20,000 upon the whole contract, according to the terms of the contract itself, which is more than the court now find due the plaintiffs on the stock portion, about twice as much.

4. But by a sort of equitable view of the contract and the work done under it, we do find the plaintiffs entitled at the time of the demand, to receive a less sum than the whole balance claimed, amounting to some §20,000 in all, about one-half in the stock of defendants’ company which was worth at the time and always since, two-thirds less than its nominal amount. If, then, we allow the plaintiffs to have judgment for the nominal amount of the stock, we give them two-thirds more of the funds of the company than they were then fairly entitled to have and take just so much out of the other stockholders without any just equivalent.

This, it seems to us, would be visiting an injustice upon one party, and giving^ the other an advantage, which we ought not to do, when the parties seem to have been just about equally in fault, and the plaintiff’s only entitled to recover upon an equitable basis, by compensating defendants ibr all loss. We think, therefore, the most which the plaintiffs should recover for this part performance is the cash portion of the work done, and the value of the stock, as before stated, with the election to have the stock itself, if they prefer.