Smith v. Bailey

181 N.W. 926, 105 Neb. 754, 1921 Neb. LEXIS 113
CourtNebraska Supreme Court
DecidedMarch 11, 1921
DocketNo. 21320
StatusPublished
Cited by9 cases

This text of 181 N.W. 926 (Smith v. Bailey) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Smith v. Bailey, 181 N.W. 926, 105 Neb. 754, 1921 Neb. LEXIS 113 (Neb. 1921).

Opinion

Flanbburg, J.

This action seems to have been for damages, as well as to recover $3,000 as the agreed price for certain ivells constructed by the plaintiff. The case was submitted to the jury as an action to recover the contract price, and the jury returned a verdict of $2,500 against defendants. Defendants appeal.

[755]*755The record shows that there had existed a shortage of water in the municipal wells of the city of Red Cloud. The city council had ordered tests made for other wells and had endeavored to increase the water supply, but without success. Plaintiff was confident that he could furnish a sufficient amount of water by constructing shallow wells at certain -points find by siphoning water from them into the deeper city wells. The plaintiff’s plan required no pumps. The city pumps were sufficient to draw the air from the siphon, which would commence the floAv of Avater, after which, it was considered, the siphon would be self-operating and provide a continuous stream of water, with little cost of operation or maintenance.

For some reason, the city made no direct agreement with plaintiff, but a number of citizens of Red Cloud, the defendants in this case, did enter into a written agreement with him, and it appears that they had some sort of an understanding with the city that they would be reimbursed for what expenditures they should make. The written contract was drawn up and circulated among the citizens of the town, 54 of whom signed.

It provided that the plaintiff, and one Nelson, to whose rights the plaintiff has now succeeded, should construct certain wells, ditches and conduits within 60 days from the signing of the contract, and thereafter should receive .$1 for every day that they should be able to conduct into the city wells 250,000 gallons of water. The contract further recited that it was to be “subject to the privilege on the part of the * * * (citizens) to purchase the well or wells and system by which * * * (plaintiff and Nelson) supply said water for $3,000, in which event the obligation to pay $1 a day ceases. The said Smith and Nelson agree to sell to the first parties at any time for $3,000 all their rights and interests in any well or wells, ditches, pipes, conduits, and other means of supplying and conducting said Abater.”

The testimony in behalf of the plaintiff is to the effect that the plant was constructed, as agreed, at a cost to [756]*756him of from $2,000 to $2,500, and that 250,000 gallons of water, or as much thereof as the city was able to use, was conducted into the city wells daily for the period of three years, during which time the plaintiff received from the defendants $1 a day. After the three years, hoAvever, the defendants refused to make any further payments, though the plaintiff claimed to be able and Avilling to continue in the performance of his contract. The defendants justify their action in refusing to make further payments on the ground that the wells constructed by the plaintiff fell far short of supplying the amount of water specified in the contract.

Error is predicated upon the admission of evidence and upon instructions given by the court, based upon the evidence so introduced. The evidence complained of was admitted upon the theory that the contract was ambiguous, indefinite and incomplete, and that oral testimony and extrinsic evidence could be resorted to, to supplement the written contract and to establish the real and entire agreement between the parties.

By the plaintiff’s testimony, which is corroborated to some extent by the minutes of the city council, there is evidence tending to shoAV that the plaintiff had an understanding with certain signers of the contract that, if the Avells produced the amount of water represented, and that if the project proved to be successful for the period of one year, it should then be obligatory upon the citizens signing the contract to purchase the plant from the plaintiff at the price of $3,000. It is upon such verbal agreement that the judgment of the lower court is based.

The vital question in the case before us is Avhether such an understanding and agreement may be allowed to be shown by evidence extrinsic'to the AAU’itten instrument.

Though generally held that contracts for the performance of services or for the continuous furnishing of commodities are, Avhen the contract itself specifies no period of duration, terminable, upon reasonable notice, at the will of either party to the contract (McCullough-Dalzell Crucib[757]*757le Co. v. Philadelphia Co., 223 Pa. St. 336; Stonega Coal & Coke Co. v. Louisville & N. R. Co., 106 Va. 223, 9 L. R. A. n. s. 1184; Echols v. New Orleans, J. & G. N. R. Co., 52 Miss. 610; Bailey v. Stafford, Inc., 166 N. Y. Supp. 79; 13 C. J. 604, sec. 630), the case here hardly comes within that rule. The plaintiff’s contract in this case was to build an adjunct to the city water plant, and his wells, by automatic operation, were expected to increase the flow of the city wells 250,000 gallons a day. His contract was more than the furnishing of a commodity, it was, as-well, to build a structure and to make the necessary expenditures to that end. It is apparent from the contract that it was not contemplated by the parties that, the structure being complete and in successful operation, the citizens obligated could, at will, declare the duration of the contract at an end within a few days or in one or two years after the performance of the contract had begun. The plaintiff had made an investment, had constructed an addition to the city water plant, and these properties would obviously be rendered absolutely worthless to him, should his contract be terminated. Provision was made so that he might derive an income from his investment and have his capital protected. He was to receive $1 a day for every day that his apparatus should perform and for every day that he should be able to conduct into the city wells the required amount of water. The rate he was to receive — $365 a year — was a sufficient income on a $2,000 or $2,500 investment, when there wras to be no cost of operation, and little expense for maintenance. With the object, however, of allowing the citizens obligated to put an end to the daily-payment provision of the contract, it is apparent that the privilege of the purchase of the plant at $3,000 was inserted.

The contract has a definite legal meaning as to its duration. The citizens who signed this contract could not have been heard to say that they had a parol understanding and were to be relieved from the daily payments at any time they desired, even though the plaintiff’s plan should prove successful and he be able to deliver the amount of [758]*758water agreed upon. Such an understanding would have been directly repugnant to the written instrument, just as much so as the understanding that the plaintiff has sought to prove by his extrinsic evidence.

But the evidence introduced, and now complained of, had a bearing, not alone upon the duration of the contract, but Avas offered for the purpose of showing that, at the end of one year, the citizens signing the contract were expressly bound to purchase the plant at $3,000. Such an oral agree-' ment.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

METRO. UTIL. DIST., ETC. v. Fid. & Dep. Co. of Maryland
264 N.W.2d 854 (Nebraska Supreme Court, 1978)
Metropolitan Utilities District v. Fidelity & Deposit Co.
264 N.W.2d 854 (Nebraska Supreme Court, 1978)
Perry v. Gross
53 N.W.2d 73 (Nebraska Supreme Court, 1952)
Cox v. Rippe
19 N.W.2d 514 (Nebraska Supreme Court, 1945)
Barish v. Chrysler Corporation
3 N.W.2d 91 (Nebraska Supreme Court, 1942)
Weidenfeld v. Olson
271 N.W. 806 (Nebraska Supreme Court, 1937)
Ploog v. Roberts Dairy Co.
240 N.W. 764 (Nebraska Supreme Court, 1932)
Hale v. Central Bank
43 S.W.2d 530 (Supreme Court of Arkansas, 1931)
Davis v. Ferguson
197 N.W. 390 (Nebraska Supreme Court, 1924)

Cite This Page — Counsel Stack

Bluebook (online)
181 N.W. 926, 105 Neb. 754, 1921 Neb. LEXIS 113, Counsel Stack Legal Research, https://law.counselstack.com/opinion/smith-v-bailey-neb-1921.