Hipskind Heating & Plumbing Co. v. General Industries, Inc.

194 N.E.2d 733, 136 Ind. App. 647, 1963 Ind. App. LEXIS 292

• Court: Indiana Court of Appeals
• Decided: December 17, 1963
• Docket: 19,689
• Status: Published

Opinions

Pfaff, J.

This is an appeal from a judgment of the Allen Superior Court No. 3, denying plaintiff-appellant relief in an action brought for foreclosure of a mechanic’s lien upon certain real estate owned by the appellee.

The cause was submitted for trial before the court upon the issues formed by appellant’s amended complaint and appellee’s answer thereto. At the close of appellant’s evidence, appellee moved for a directed verdict against the plaintiff-appellant, which was granted by the court, and judgment was entered thereon that the plaintiff take nothing by its complaint and that the plaintiff pay the costs of the action.

Appellant filed its motion for a new trial setting forth as cause therefor that the decision of the court is contrary to law, which motion was subsequently overruled by the court. The sole assignment of error in this appeal is the court’s overruling of appellant’s motion for a new trial.

The motion made by the defendant-appellee at the conclusion of the plaintiff-appellant’s evidence operates or has the same effect as a demurrer to the plaintiff’s evidence. Smith v. Switzer (1933), 205 Ind. 404, 409, 186 N. E. 764; Roop, Adm’r. v. Woods (1962), 184 Ind. App. 88, 186 N. E. 2d 439, 440; Abernathy v. McCoy (1926), 91 Ind. App. 574, 600, 154 N. E. 682 (Transfer denied). It is to be tested by the same rules of law as is a request for a peremptory instruction to a jury. The sole question presented to the court is, therefore, whether or not the evidence introduced in behalf of the plaintiff, assuming it to be true, and considering as proved all facts which the evidence proves, or by legitimate inference tends to prove, establishes the plaintiff’s case as laid. Smith v. Switzer, supra; Abernathy v. McCoy, supra.

On appeal this court, in reviewing the trial court’s action, may consider only the evidence and reasonable inferences which may be drawn therefrom most favorable to the plaintiff-appellant, to determine if there is any evidence from which it may be reasonably inferred that the plaintiff-appellant was entitled to relief. Hill v. Rogers (1951), 121 Ind. App. 708, 712, 99 N. E. 2d 270 (Transfer denied).

In reviewing the evidence in the record before us, we believe that the appellant’s evidence tended to prove the following material facts:

At some time during the month of March of 1958, there was a parol agreement entered into between appellant and appellee whereby the former agreed to install a fire sprinkler system throughout an entire manufacturing plant building owned by the latter. That certain preliminary work necessary to the installation was begun on March 17, 1958, and that actual installation of the system was commenced on May 13, 1958. The system was to be installed and connected to the city water supply in conformance with certain regulations and requirements of fire protection companies and the Underwriters’ Manual. Pursuant to the agreement between the parties, approval was obtained from the Indiana Rating Bureau prior to commencing performance of the contract. Upon completion of the work, the requirements of the Indiana Rating Bureau required that a test for leaks in the system be conducted by putting a 200-pound hydrostatic test on all pipe, including the underground. A new system would be inspected by the Bureau after it had been installed.

At various times prior to May 13, 1958, modifications were made to the original agreement, which limited the extent of the sprinkler system to be installed. The final contract price for the system, as modified, was set at $18,814. A proposed written contract, setting forth the nature of the undertaking and embodying all terms and conditions thereof, was signed by appellant and presented to appellee for signature at some time after May 23, 1958, one clause of which provided for monthly progress payments by appellee equal to ninety per cent of the value of labor and materials incorporated in the work and of materials stored at the work site.

At all times between May 13,1958, and June 16,1958, appellant rendered performance according to the agreement, as modified, installing the system in accordance with the general usage in the trade relating to the installation of the type of system in the type of building. The sprinkler system was designed to fit the particular building owned by the appellee and consisted mostly of piping, hangers to hang the piping and the sprinkler heads. On June 16, 1958, the building was totally consumed by fire.

As of the date of the fire, approximately forty per cent of the contract had been performed, thirty-five to forty per cent of rco the city water supply in conformance with certain regulations and requirements of fire protection companies and the Underwriters’ Manual. Pursuant to the agreement between the parties, approval was obtained from the Indiana Rating Bureau prior to commencing performance of the contract. Upon completion of the work, the requirements of the Indiana Rating Bureau required that a test for leaks in the system be conducted by putting a 200-pound hydrostatic test on all pipe, including the underground. A new system would be inspected by the Bureau after it had been installed.

At various times prior to May 13, 1958, modifications were made to the original agreement, which limited the extent of the sprinkler system to be installed. The final contract price for the system, as modified, was set at $18,814. A proposed written contract, setting forth the nature of the undertaking and embodying all terms and conditions thereof, was signed by appellant and presented to appellee for signature at some time after May 23,1958, one clause of which provided for monthly progress payments by appellee equal to ninety per cent of the value of labor and materials incorporated in the work and of materials stored at the work site.

At all times between May 13, 1958, and June 16, 1958, appellant rendered performance according to the agreement, as modified, installing the system in accordance with the general usage in the trade relating to the installation of the type of system in the type of building. The sprinkler system was designed to fit the particular building owned by the appellee and consisted mostly of piping, hangers to hang the piping and the sprinkler heads. On June 16, 1958, the building was totally consumed by fire.

. As of the date of the fire, approximately forty per cent of/the contract had been performed, thirty-five to forty.per cent of the physical equipment had been put into the building, and forty-five per cent of the labor had been furnished. None of the underground water supply, which was to run from the property line to the building, had been installed; nor had any part of the valve pit or any of the underground pipe leading to the building.

The total value of preliminary work done, which was necessary to the installation of the system and of materials lost in the fire, including the cost of installation, was approximately $7,400. On or about June 27, 1958, appellant submitted an itemized statement of work done and materials furnished, up to the date of the fire, to the appellee. At some time within thirty days from the date of the fire appellant made demand upon appellee for payment for the work that had been done up until the fire. Since all salvageable parts not yet installed were returned to appellant’s inventory, no charge therefor was included in appellant’s demand. Demand for payment was refused by appellee. Appellee has not offered to pay for any part of the work done up until the date of the fire and all amounts therefor remain unpaid. Appellant does not contend that the fire was caused through the fault of appellee.

At the outset, we are confronted with the principle of law adopted by our Supreme Court in the case of Krause v. Board, etc. (1904), 162 Ind. 278, 70 N. E. 264, 65 L.R.A. 111, 102 Am. St. Rep. 203, 1 Ann. Cas. 460, which, if applicable to the. instant case, is controlling and determinative upon the issues raised by appellant in this appeal.

In the Krause case, a written contract was entered into between a contractor and the trustees of a school town whereby the former agreed to furnish the materials for, and to erect and finish, an annex to a school building belonging to the trustees, and also to make certain improvements upon the latter building for a total price of $3,853.35, to be paid upon completion of the work. Provision was also made for progress payments based upon estimates to be furnished by the architect of materials provided and labor performed, the amounts so paid to be deducted from the final estimate provided for by contract. The contract also provided:

“ ‘The party of the first part [the school town] shall not be in any manner answerable, accountable, or responsible for any loss or damage that shall or may happen to said work or any part thereof, or for any of the materials or anything used or employed in finishing the same.’ ”

Attached to the contract were specifications providing that all work, when finished, was to be turned over perfect, complete and undamaged in every particular; that the whole work was to be inspected as it progressed and that it was to be accepted by the owner and the architect before a final settlement was made; On July 24, 1899, the building, which was the subject matter of the contract, was gutted by fire to such an extent that further performance under the contract was rendered impossible. As of that date, the contractor had progressed with its work to the point where the cost of completion was $35.00 and the value of the work done and materials furnished was thirty-five cents less than the contract price. Suit was filed by the trustees to recover upon the performance bond executed by the contractor,

alleging a breach of contract in that the contractor failed to proceed with the execution of the contract after the fire. By way of cross-action against the trustees the contractor filed a “cross-complaint” seeking, first, to recover for a balance unpaid under the contract, and, second, to recover in quantum, meruit. Upon the issue of recovery on the contract, our Supreme Court quoted with approval from the case of Butterfield v. Byron (1891), 153 Mass. 517, 27 N. E. 667, and said:

“ . . . The observations of the court in Butterfield v. Byron . . . are quite to the point upon the matter now under consideration. . . . ‘The agreement of each to complete the performance of the contract . . . was on an implied condition that the building should continue in existence. Neither can recover anything of the other under the contract, for neither has performed the contract so that its stipulations can be availed of.’ ” (Our omissions)

Applying the principles set forth in the Butterfield case relative to the question of recovery upon the contract, and citing authorities from other states and from England, our Supreme Court in the Krause case held that performance by both parties was excused where the subject matter of the contract (to bestow labor or materials upon a particular building already in existence) was destroyed, without the fault of either party, prior to full performance of the contract. Also, the court expressly rejected the contention, advanced by the trustees, that the provision of the contract that the school town “shall not be in any manner answerable, accountable, or responsible for any loss or damage that shall or may happen to said work or any part thereof”, amounts to a special provision which guarded against any implication that would leave the trustees to bear any part of the loss or damage resulting from the destruction of the property.

Upon the question of recovery by the contractor on its cross-action against the trustees, the Supreme Court in the Krause case denied recovery on the contract, holding that it was unapportionable and performance of the whole work was a condition precedent to recovery thereon. As to the question of the contractor’s right to recover on a common count, the issue raised by appellant in this appeal, the court looked to the English case of Appleby v. Myers, 2 L.R.C.P. 651, and stated:

“The subject under consideration received an exhaustive consideration in Appleby v. Myers, 2 L.R.C.P. 651. That was a case stated by consent without pleadings. The contract was to install a steam boiler, engine, etc., in a building belonging to defendant, for a consideration to be paid on the completion of the work. The building was burned before the work was finished. The court said: ‘Where, as in the present case, the premises are destroyed without fault on either side, it is a misfortune equally affecting both parties; excusing • both from further performance of the contract, but giving a cause of ación to neither.’ ...” (Our emphasis)

Further, the court, in its opinion in the Krause case, quoted from Story, Bailments (9th ed.), §426b, as follows:

“ ‘Suppose there is a contract to do work on a thing by the job (as, for example, repairs on a ship), for a stipulated price for the whole work, and the thing should accidentally perish, or be destroyed, without any default on either side, beforé the job is completed, the question would then arise, whether the workman would be entitled to compensation pro tanto for his work and labor done, and materials applied up to the time of the loss or destruction. It would seem, that, by the common law in such a case (independent of any usage of trade) the workman would not be entitled to any compensation; and that the .rule would apply, that the thing should perish to the employer, and the work to the mechanic.’ ”

Also; in its holding upon the same question the court stated:

“ . . . As applied to this case, we may well adopt the following, which we take from 15 Am. & Eng. Ency. Law (2d ed.), 1090: Tn a case of this nature, the defendant [owner] receives no benefit, and, if he is equally blameless and irresponsible for the accident by which the property is destroyed, why should not the law leave the parties as it finds them, and let each suffer his own loss?’

“We think that neither said firm nor the appellee was entitled to recover in this case. ...”

Appellant, in its brief, quotes at length from the case of Butterfield v. Byron, supra, in support of the proposition that it has the right to recover in quanturn meruit for work done and materials furnished up until the time of the fire, including that part of the court’s opinion appearing at pp. 522-524, which reads as follows:

. “In this country, where one is to make repairs on a . house of another under a special contract, or is to furnish a part of the work and materials used in the erection of a house, and his contract becomes impossible of performance on account of the destruction of the house, the rule is uniform, so far as the authorities have come to our attention, that he may recover for what he has done or furnished. ...

"

“We are of opinion that the consideration which the defendant was to receive was an entire sum for the performance of the contract, and that the payments made were merely advances on account of it, and that, on his failure to perform the contract, there was a failure of consideration which gave the plaintiff a right to sue for money had and received, and that the like failure of consideration on the other side gave the defendant a right to sue on an implied assumpsit for work done and materials found.”

It seems clear that in so holding the Massachusetts court rejected the English rule, particularly as found in the case of Appleby v. Myers, supra, and by further stating:

“ . . . The decisions in England differ from those of Massachusetts, and of most of the other states of this country. There the general rule, stated broadly, seems to be that the loss must remain where it first falls, and that neither of the parties can recover of the other for anything done under the contract....

“In England it is held that one who has partly performed a contract on property of another which is destroyed without the fault of either party, can recover nothing; and on the other hand, that one who has advanced payments on account of labor and materials furnished under such circumstances cannot recover back the money. Appleby v. Myers, L. R. 2 C. P. 651....” Butterfield v. Byron, supra, at p. 522.

In the Krause case, the question of a right to recover upon the contract was present and our Supreme Court quoted with approval the rule of Butterfield v. Byron, supra, upon that issue. Upon the question of a right to recover in quantum meruit, also an issue in the Butterfield case, our Supreme Court quoted with approval from the rule of Appleby v. Myers, supra, which had been rejected by the Massachusetts court, and decided that issue. Although our Supreme Court did not expressly reject the principles of quantum meruit recovery discussed and applied in the Butterfield case, it is significant, we think, that the court in the Krause case adopted the English view expressed in the case of Appleby v. Myers, supra, as law applicable to the issue.

Appellant has cited numerous authorities from other jurisdictions which support its right to recover in quanturn meruit for work done and materials furnished up until the time of the fire, which may well represent the majority view in this country.

Appellant further asserts in its brief:

“In fact, England is the only place where the decided cases support the trial court.”

Whether or not the rule adopted by our Supreme Court in the case of Krause v. Board, etc., supra, reflects the majority view in this country is not within our province to decide. In this connection see Williston, Contracts (Rev. Ed.), Vol. VI, §1975, pp. 5549-5550.

We are of the opinion that the issue of law presented by this appeal is not a case of first impression in this state and that it has been decided by our Supreme Court in the case of Krause v. Board, etc., supra, which is precedent binding upon this court, and which was followed by this court in the case of Rossville Alc. & Ch. Corp. v. Steel Constr. Co. (1938), 104 Ind. App. 515, 8 N. E. 2d 1016. See also In re Petitions to Transfer Appeals (1931), 202 Ind. 365, 174 N. E. 812; Restatement of Law of Contracts, American Law Institute, §281, ch. 10, p. 415.

For the reasons heretofore stated, we find that the trial court did not err in rendering judgment against the plaintiff, appellant herein, at the close of plaintiff-appellant’s evidence.

The judgment of the trial court is therefore affirmed.

Hunter, P. J., and Kelley, J., concur. Mote, J., dissents with opinion.