Pasquotank & North River Steamboat Co. v. Eastern Carolina Transportation Co.

82 S.E. 956, 166 N.C. 582, 1914 N.C. LEXIS 452

• Court: Supreme Court of North Carolina
• Decided: October 7, 1914
• Status: Published

Opinion

HoKe, J.,

after stating the case: Where parties contract with reference to specific property and the obligations assumed clearly contemplate its continued existence, if the property is accidentally lost or destroyed by fire or otherwise, rendering performance impossible, the parties are relieved from further obligations •concerning it.

As to the executory features of such an agreement, the destruction of the property, without fault, will amount to a discharge- of the contract. 3 Page on Contracts, sec. 1730; Clark ■on Contracts (2 Ed.), p. 475. Under the circumstances as stated .and in reference to the adjustment of rights and liabilities of the parties by reason of stipulations already performed, if the •cpntract in express terms or from its nature is entire and indi-wisible, requiring full performance before anything is due, then no recovery can be had; but if the contract is severable, and •substantial benefit has been received under it and enjoyed by •one of the parties, this must ordinarily be, accounted for, either according to the rates fixed by the contract or under a quantum meruit, as the case may be; and if under the terms of the contract the work done or the services rendered are to be paid for by installments or at stated periods, these installments or pay•ments being fixed with regard to the value of the work done or as specified portions are performed, in that event, if the prop- ■ erty is destroyed, the claimant may recover for the installments ■ due or for the portion of the work done as for an amount already ■ earned.

These general principles are in accordance with decided cases 'here and in other jurisdictions. Keel v. Construction Co., 143 N. C., pp. 429-432; Tussey v. Owen, 139 N. C., 457; Coal Co. v. Ice Co., 134 N. C., 574; Lawing v. Rintels, 97 N. C., 350; Chamblee v. Baker, 95 N. C., 98; Gorman v. Bellamy, 82 N. C., 496; Brewer v. Tysor, 50 N. C., 173; Viterbo v. Friedlander, 120 U. S., 707; McCaslin v. Mfg. Co., 155 Ind., 298; Dexter v. Norton, 47 N. Y., 62; Wells v. Colnan, 107 Mass., 514; Stewart v. Stone, 127 N. Y., 500; and tbe two cases of Lawing v. Rintels, supra, and Keel v. Construction Co., very well illustrate tbe different positions as applied to tbe facts of tbe present appeal. In Laiving’s case a contract to construct certain buildings as a whole was beld to be entire, and, on accidental destruction of buildings before completion, it was beld that tbe contractor could not recover any portion of tbe price. In tbe later case of Keel v. Construction Co. tbe contract was to construct a building, tbe payment to be# by certain installments, due as specified portions of tbe structure were completed; tbe apportionment having evident reference to tbe portion of tbe work done, and in tbe opinion tbe general principles applicable were stated as follows:

“When one contracts with tbe owner of a lot to furnish all tbe materials and build and construct a bouse thereon for a certain price, tbe contract being entire and indivisible, if tbe structure, before completion, is destroyed by fire, without fault on tbe part of tbe owner, and tbe contractor, being given tbe opportunity, refuses to proceed further: in such case be is liable to refund any money which may have been paid him on tbe contract, and also for damages for its nonperformance. Brewer v. Tysor, 48 N. C., 181; Lawing v. Rintels, 97 N. C., 350; Beach’s Modern Law of Contracts, sec. 232, citing Tompkins v. Dudley, 25 N. Y., 272.”

And this principle will not be affected by tbe fact that tbe money is to be paid by installments, if tbe price is entire for a completed building and these installments are arbitrary and fixed without any regard to tbe value of any distinctive portion of tbe work. School Trustees v. Barrett, 27 N. J. Law.

But if tbe contract is divisible and severable — if tbe price is not entire for a completed building, but is payable by install ments, these installments being fixed with regard to the value of the work done, or as certain portions of same are finished: in that event, if the structure be destroyed by inevitable accident, “the builder is entitled to recover for the installments which have been fully earned.” But it seems that he has no claim for a proportional part of the next installment which has been only partially earned. Brewer v. Tysor, 50 N. C., 173; Beach Modern Law, citing Richardson v. Shaw, 1 Mo. Ap., 234.

In this well considered case, Laws, J., delivering the opinion, says: “The true principle which controls such a case as this is clearly stated in Addison on Contracts, 452: ‘If the contract price of the building is to be paid by installments on the completion of certain specified portions of the work, each installment becomes a debt due to the builder as the particular portion specified is completed; and if the house is destroyed by accident, the employer would be bound to pay the installment then due, but would not be responsible for any intermediate work and labor and materials.’ ” And such is in effect the case presented here, the contract showing that plaintiff was to be paid “$80 per Sunday, payable on the 1st and 15th of each month after such steamship has been so used by said party of the second part during said term”; and in further support of the position that the price per Sunday was to be regarded as a severable item, it is provided further in the contract that in case the weather was such as to prevent the trip on any given Sunday, the stipulated price for such day was not to be required.

On the facts in evidence, therefore, the plaintiff, in any aspect of the case, had a definite claim.for $160, earned under the provisions o'f the contract, which entitled him to bring suit; and if defendant desires to insist that it has been wronged by plaintiff’s failure to perform further, the position should be made available by counterclaim, the course suggested and approved in some of the authorities cited. See Coal Co. v. Ice Co., 134 N. C., at page 579; Chamblee v. Baker, supra; Gorman v. Bellamy, supra.

In reference to this counterclaim of defendant, it may be well to note that the obligations of an ordinary business contract are imperative in their nature. This principle, which relieves a party to such a contract by reason of the destruction of the property with which it deals, is sometimes treated as an exception; the general rule being the other way. 9 Cyc., pp. 62Y-628-629.

Before a party can avail himself of such a position, he is required to show that the property was destroyed, and without fault on his part. For this reason, and further because, by the terms of the present contract, the care and custody of the property was left with plaintiff, if it is established that plaintiff has failed to further perform the executory features of this agreement, the burden would be on plaintiff to show that the steamer was destroyed by fire and that the plaintiff and its agents were in the exercise of proper care at the time.

For the reasons heretofore given, the judgment of nonsuit must be set aside and a new trial had.

New trial.