Riddell v. Peck-Williamson Heating & Ventilating Co.

69 P. 241, 27 Mont. 44, 1902 Mont. LEXIS 83

• Court: Montana Supreme Court
• Decided: June 23, 1902
• Docket: No. 1,419
• Status: Published

Opinion

MB. JUSTICE PIGOTT

delivered the opinion of the court.

• This action was brought on a contract to recover judgment for $9,312.96, besides interest. The plaintiffs recovered a judgment for $9,743.67, with costs. From it and an order refusing a new trial, the defendant prosecutes these appeals.

■Riddell and Suiter were eo-partners. Suiter, in bis own name, but for tbe benefit of the firm, on August 5, 1895, entered into a contract with the executive board of the state agricultural college for the erection by him of ceidain buildings. Thereafter the defendant (a corporation) and the executive board miada a contract by which the defendant agreed to install a heating and ventilating plant in the buildings. Subsequently, and on August 15-, 1896, Suiter, in his own namej but for the partnership', entered into a contract, which was reduced-to writing, and subscribed by the parties as follows:

“Bozeman, Mont., August 15th, 1896. Agreement entered into this date by and between Charles Suiter, of Helena, Montana, general contractor for furnishing the material and building the buildings for the Montana State Agricultural College, Bozeman, Montana, the party of the first part, and the Peck-Williamson Heating and Ventilating Company, Cincinnati, Ohio, party of the second part. - The party of the first part agrees to furnish all the extra material and do all the extra labor that is now not contracted for in general contract for buildings that is necessary toi install the heating, ventilating, and sanitary apparatus of the party of the second part in the Montana State Agricultural College Buildings, Bozeman, Montana. All material and labor party of the first part furnishes party of the second' part to be paid for by party of the second part according to the following schedule of prices:” the remainder of the instrument being devoted to the rules for measi-uring the work, the description of the material to be used, and the schedule of prices. The contract does not expressly provide when payment shall be made.

Prior to June 22, 1897, the plaintiffs had performed labor and furnished material under the terms of the contract, which, according to the schedule of prices, amounted to $9,312.96, and which entered into and became parts of the buildings, and cannot be removed. Prom that day they ceased work, and have never done anything further under .the contract. They abandoned it because the defendant refused to> pay for the labor and material already performed and furnished, and were unable to proceed for lack of funds. They left undone work amounting to- $2,227.67. Their second amended complaint purports to state two causes of action. The first cause of action is based upon the written contract. They allege performance thereunder to- the extent of $0,312.96, and refusal by the defendant to pay, and .aver that at the time the written contract was signed there was an oral agreement that payments should be made as the labor and material were done and furnished and measured in the buildings and approved by the architect or by.the defendant; that a local.usage or custom to that effect was in existence, and that the written contract was made with reference thereto, and with the intention that the usage and custom ivere to control its interpretation. In the second cause of action the plaintiffs counted upon the furnishing of the material and upon the doing of the labor mentioned at the request of the defendant, and alleged the value thereof to be $9,312.96; in short, a quantum meruit and valebat count.

1. Can the action be maintained upon the special contract ? The defendant contends that it was prematurely brought. Upon its face the contract is entire, and the consideration single. The intention of the parties, as disclosed and evidenced by the terms of their engagement reduced to writing, ivas that the defendant should not become indebted to Suiter unless and until he furnished all the material and did all the labor specified in the contract. There was in the contract no time expressly appointed for payment, but the law made the price due and payable upon complete performance by Suiter or his firm. Substantial performance by Suiter of his promises ivas a condition precedent to the company’s liability under the express contract to pay the whole or any part of the consideration. (Franklin v. Schultz, 23 Mont. 165, 57 Pac. 1037.) The fixing of prices upon the different items did not operate as a severance (Isaacs v. McAndrew, 1 Mont. 437) ; it ivas a mere means of ascertaining the total compensation to be paid in the event Suiter executed the undertaking.

The plaintiffs alleged that at the time the written contract was made an oral agreement was entered into that payments should be made, in conformity with a usage and custom, as the work was done and the material furnished and measured to the approval of the architect or of the defendant, and that the contract was made with reference to such usage and custom, and with the intention that the interpretation of the contract should be controlled thereby. We doubt whether the evidence was sufficient to establish either such alleged oral agreement or such alleged usage or custom. For the purposes of these appeals, let the sufficiency of the evidence be assumed; let it be assumed that the oral agreement accompanied the making of the written contract,' and that such a custom as the one pleaded then existed; and let it further be assumed that, the customj and oral agreement being proved, payments as the work progressed was a condition precedent to plaintiffs’ obligation to complete the terms of the written contract This evidence tended to prove a severance sub modo or an apportionment; and, if payments were to be made according to- custom or as orally agreed, then a cause of action accrued as soon as the defendant failed to make a payment when it should have been made. Default in making such payment would have entitled the plaintiffs, if they continued to perform under the contract, to recover judgment for the price of the Work already done; or such default would have warranted them; in treating the special contract as at an end, and authorized them to maintain an action on the implied promise of the defendant to pay the reasonable worth of the labor done and material furnished. They could, at their option, have pursued either course. Was the evidence admissible over the objections interposed by the defendant? Its competency was seasonably challenged by objections and motions to strike on the ground that the plaintiffs- sought thereby to alter or contradict the terms of the written contract; to the overruling of these the defendant reserved exceptions. Section 3132 of the Code of Civil Procedure, which declares a common-law rule (Gaffney Mercantile Co. v. Hophins, 21 Mont. 13, 52 Pac. 561), provides that: “When the terms of an agreement have been reduced to writing by the parties, it is to be considered as containing all those terms, and therefore there pan be between the parties and their representatives, or successors in interest, no; evidence of the terms of the agreement other than the contents of the writing, except in the following cases: (1) Where a-mistake or imjperfection of the writing is put in issue by the pleadings. (2) Where the validity of the agreement is the fact in dispute. But this section does not exclude other evidence of the circumstances under which the agreement Avas made, or to Avhich it relates, as defined in Section 3136, or to explain an extrinsic ambiguity, or to establish illegality or fraud. The term ‘agreement’ includes deeds and wills, as Avell as contracts between parties.” Section 2204 of the Civil Code declares the familiar principle that “when a contract is reduced to Avriting, the intention of the parties is to be ascertained from the Avriting alone, if possible; subject, however, to the other provisions of this title.” Section 2186 of the CNil Code provides: “The execution of a contract in writing, whether the law requires it to be written or not, supersedes all the oral negotiations or stipulations concerning its matter which preceded or accompanied the execution of the instrument.” Section 3146 of the Code of Civil Procedure announces no new rule Avhen it prescribes that eAddence may be given upon a trial of “usage, to explain the true character of an act, contract or instrument, Avhere such true character is not otherwise plain; but usage is never admissible, except as an instrument of interpretation.”

It is perfectly clear that the evidence was erroneously received. The rule which prohibits the reception of evidence of oral promises or agreements made prior to or contemporaneously Avith the execution of a Avritten contract purporting to' embrace all its terms, Avhich contradict, change, add to, or subtract from the express terms, is declared and interpreted by the decisions of this court, as Avell as prescribed by statute: Knox v. Gerhauser, 3 Montana Reports, 278; Fisher v. Briscoe, 10 Montana Reports, 124, (25 Pac. 30); Anderson v. Perkins, 10 Montana Reports, 154, (25 Pac. 92); Gaffner Mercantile. Co. v. Hopkins, 21 Montana Reports, 13, (52 Pac. 561); Sanford v. Gates, Townsend & Co., 21 Montana Reports, 277, 289, (53 Pac. 749); Armington v. Stelle, ante, p. 13, (69 Pac. 115). This rule is applicable to oral negotiations and agreements which vary the legal construction and import of a written contract, although they do not contradict its express terms. (Cliver v. Heil, 95 Wis. 364, 70 N. W. 346, and cases there cited; 27 Am. & Eng. Enc. Law) (1st Ed.), p. 862.) As to evidence of usage and custom, a similar rule prevails (Fitzgerald v. Hanson, 16 Mont. 474, 41 Pac. 230); it is never admissible when inconsistent .with' any necessary implication from the express terms of a written agreement, nor to vary, or contradict the legal import or effect of the contract: The testimony concerning the alleged oral agreement and supposed usage and custom in respect of the times when payments were to be made varied the legal import and effect of the written contract, and should have been excluded. It added an incident which is inconsistent with the legal interpretation of the express terms of the contract. . • ■ .

-The action cannot be maintained upon the special contract in writing.

2. Under the circumstances, can the action be maintained upon the quantum meruit and valebai count?

This is not an action where, in an attempt in good faith to perform a contract, there have been comparatively unimportant deviations from, or omissions to conform to; its terms. On the contrary, it is a case where the plaintiffs, after partly performing an indivisible contract, without legal cause voluntarily abandoned and refused to complete it, leaving the work unfinished in important and substantial particulars. They insist that they may disregard the express contract which they have refused to perform, and recover the value of the labor and material in an action upon a new contract which they say has arisen from the retention by the defendant of the benefits conferred by part performance of the express contract.

The question involved has been the occasion of decisions almost innumerable. The greatest contrariety of opinion exists. Britton v. Turner, 6 New Hampshire Reports, 481 (26 Am. Dec. 713), is perhaps the leading case in the United States, for tbe view tbat tbe wrongful refusal to perform and willful abandonment of a special contract does not preclude tbe violator from maintaining an action upon tbe eommon counts for tbe reasonable value of tbe services rendered and material furnished. It wasi an action in assumpsit upon tbe quantum meruit for personal services rendered by tbe plaintiff 'as a laborer under an entire contract abandoned by bim after part performance. - Although tbe soundness of that decision was doubted by tbe same court in Davis v. Barrington, 30 New Hampshire Reports, at page 529, it still remains tbe best evidence of -tbe law for the state where it was made.. Several other jurisdictions follow it. Some of the- courts which approve Britton v. Turner decline to apply its rule -to tbe part performance of a building contract, making a distinction which does not seem to rest upon any real difference between tbe two sorts of contracts. Of tbe decisions to tbe contrary, Lantry v. Parks, 8 Cowen, 63; Smith v. Brady, 17 New York Reports, 173, (72 Am. Dec. 442); Eldridge v. Rowe, 2 Gilman, 91, (43 Am. Dec. 41); Brown v. Fitch, 33 New Jersey Law Reports, 422; Serber v. McLaughlin, 97 Illinois Appellate Court Reports, 104; Gill v. Vogler, 52 Maryland Reports, 663; Timberlake v. Thayer, 71 Mississippi Reports, 279, (14 South. 446, 24 L. R. A. 231); Widman v. Gay, 104 Wisconsin Reports, 277, (80 N. W. 450), and Cochran v. Balfe, 12 Colorado Appeal Reports, 75, (54 Pac. 399)—are typical. In Franklin v. Schultz, 23 Montana Reports, 165, (57 Pac. 1037), tbe question was reserved.

We think the rule of Britton v. Turner, supra, is opposed to the -weight- of authority, and in conflict with fundamental principles of law. The opinion in that case vigorously and plausibly presents the reasons which moved the court to its conclusions, but it impresses us as proceeding upon a false premise. Judicial tribunals should not assume power to compel tbe discharge of mere ethical duties arising from imperfect or moral obligations. Without a wrong there is no cause of action. A wrong is tbe breach of a legal duty. A legal duty is an obligation arising either from tbe contract of tbe parties or tbe operation of law. (Sections 1920, 1921,* Civil Code.) Unless A. fails to discharge -a legal duty which he owes to B., the latter’s rights are not invaded, by the former. He has not been wronged, and consequently a cause of action in his favor has not accrued. According to the dictates of morality, it may well be that A., having received a benefit, which he must keep1 and cannot return, from the part performance of an entire contract by B., who wilfully and without valid excuse refused to perform fully, should be willing to do unto B. as he would have B. do unto him were their relative positions reversed, namely, pay a sum equal to the, net value of the benefit But the law, as we understand it, will not compel him to this. He agreed to pay when B. had performed the conditions, and not before. He has the legal right to stand uppn the contract as made. Unless there is a severance, a new contract (express or implied), a waiver, or some other valid excuse for nonperformance, B. cannot maintain an action either upon the original contract for the price or upon the common counts for the reasonable value of the work done in part performance. An attorney at law is employed to attend to a suit at a stipulated fee to be paid after its determination, and partly performs the services contracted for. He then abandons the matter without sufficient reason. Is it possible that the laws wfill permit him to recover in any form of action whatever? If so, then he can obtain a money judgment, on which execution may presently issue, even though the contract provided that he should not be paid until he had fully performed, or until a year, or some other period, had elapsed after-the final adjudication of the suit in which he was employed. Illustrations without number might be given. We regard the rule announced in Britton v. Turner, Supra,, as tending to encourage parties in violating their agreements, and as enforcing purported contracts which were not intended to be made, and which the law does not create.

. In the case at bar the fact that the defendant received the benefit of labor and material of the stipulated price of $9,-312.96 does not raise an implied promise to pay for them. There was no severance of the original contract, nor apportionment of the consideration.» The labor and material necessarily went into and became constituent parts of the buildings, and could not be returned. The defendant having no privilege or power to return them, the benefit therefrom was not voluntarily-retained. It was not the intention that they should be returned if Suiter failed or refused fully to- execute the contract on his part. If, by one contract, A. agrees to sell and deliver to 33. two horses at $100 each, and delivers but one to R, who retains and refuses to return it, there would seem to be a severance; B.’s retention and refusal being doubtless equivalent to a promise to pay for it the price agreed, less his damage occasioned by the nondelivery of the other horse. He has the privilege of keeping or returning the horse received, and when he elects to keep it there is a severance sub modo, and A. may recover judgment for the price, less whatever loss B. suffered by reason of the breach. So, where chattels1 are sold without agreement as to price, and some only are delivered, -the buyer, by keeping them as his own instead of returning, them, becomes liable to the seller for their reasonable value, and the seller to the buyer for damages. But where there is no alternative, the rule is ordinarily different; as, for example, if A. agrees to paint B.’s house at a fixed price for each square yard of surface, or for each of several coats, or agrees to paint it without stipulation as to price, and after painting a part abandons the work without lawful cause, or valid excuse, here, manifestly, B. is not indebted to A., for the contract is entire, the consideration is single, the labor and material are impossible of return, and neither intended that part performance should effect a severance of the contract or apportionment of the consideration, nor that the retention of the benefit should evince a waiver of complete performance. In such case B. has no- alternative, no choice, and A. cannot recover either upon the special contract- or upon the common counts. Under such a state of facts there is no implied promise by B. to pay, nor does the law create one. In the case at bar the plaintiffs admit that they did not fully comply with the contract, but left unperformed and unfurnished labor and material of the stipulated price of $2,227.67. At the time the action was commenced the plaintiffs still refused to proceed witb tbe work. There was no waiver by 'the defendant of full performance, no severance or apportionment, and no sufficient reason or, excuse for nonperformance. We do not think that the views expressed are in conflict with Section 2004 of the Civil Code, which provides that “ a partial performance of an indivisible obligation extinguishes a corresponding proportion thereof, if the benefit of such performance is voluntarily retained by the creditor, but not otherwise. If such partial performance is of such a.nature that the creditor cannot avoid retaining it without injuring his own- property, his retention thereof is not presumed to be voluntary.” That the plaintiffs; after the action was begun-, completed the work at the request of the executive board of the. college, which charged- the cost thereof ($2,227.67) to the defendant, is a fact of no moment in the .present state -of the case. • • . . ■ ■ ■

Under the.facts disclosed by the evidence on the part of the plaintiffs, they were not entitled to -recover either upon the special contract pleaded in the statement of the first cause of action or upon-the quantum ■m&t'uit and- valebat count-, constituting the second cause of action.

Counsel on each side have ably argued many interesting ques1-tions, which we-need not consider. The points decided will dispose of the appeals upon their merits. The judgment and order are reversed, and the cause is remanded, with direction to grant the motion for a new trial.

Reversed and remanded,