26 Pa. Commw. 379 | Pa. Commw. Ct. | 1976
Opinion by
In tbe case now before ns, onr Supreme Court has remanded the appeal of J. A. & W. A. Hess, Inc. (Hess) to us for a determination of three specific issues not addressed in our initial opinion in this matter, J. A. & W. A. Hess, Inc. v. Hazle Township, 9 Pa. Commonwealth Ct. 409, 305 A.2d 404 (1973).
Specifically, we have been asked to decide the following:
1. Whether Hess can properly assert a quasi-contractual (quantum meruit) recovery against Hazle Township (Township) in light of its delivery to Township of quantities of gravel in excess of a stated contractual approximation.
2. Whether the trial court erred in refusing to admit evidence of practice and usage of prior years under similar contracts between the parties.
3. Whether Hess is entitled to a recovery in excess of the $350.00 on the contract.
Initially, we note that the Supreme Court’s opinion remanding this matter to us, J. A. & W. A. Hess, Inc. v. Hazle Township, Pa. , 350 A.2d 858 (1976), and outlining the three issues to which we must address ourselves, in reality, seeks to have us decide only two issues, to wit: the validity of the quantum meruit cause of action which, if valid, would of necessity dictate damages in excess of the $350.00 contract price, the question then resolving to the extent to which damages exceed $350.00, and secondly, the purported error of refusing prior practice and custom evidence.
It is within these parameters that we shall decide the case postured before us.
In 1966, Hazle Township advertised for bids for 100 tons, more or less, of crushed gravel to be applied to Township streets. Hess submitted a bid which proposed a unit price of $3.50 per ton with a resultant contract price of $350.00. Hess’ complaint alleged, and the evidence tended to establish, that over 6,000 tons of gravel were actually delivered for the contract period. The complaint seemingly set forth two distinct theories of recovery, the first being in law upon the contract (captioned “First Cause of Action”), while the second sounded in equity, in essence seeking a quantum meruit recovery (captioned “Second Cause of Action”).
Township has filed demurrers to both the contractual and quasi-contractual causes of action, but the court below sustained only the demurrer with respect to the quasi-contractual claim ordering the parties to proceed to trial upon the contractual claim only.
In our previous Hade decision, we affirmed the trial court’s award of $350.00 upon the contractual causes of action, but felt it unnecessary to reach the unjust enrichment — quantum meruit claim.
It is elementary that an order granting a demurrer holds that plaintiff has failed to state a cognizable cause of action. Hudock v. Donnegal Mutual Insurance Company, 438 Pa. 272, 264 A.2d 668 (1970). Hess asserts that quantum meruit is cognizable against Township upon a basic unjust enrichment theory, notwithstanding the invalidity of the underlying express contract.
Township counters by arguing that Luzerne Township v. Fayette County, supra note 1, and its progeny, have held that although a quasi-contractual recovery would be properly before a court where a municipality voluntarily accepted and retained benefits to a contract invalidly executed, such a recovery is improper where, as in construction-paving situations, such as the instant case, the benefits retained, i.e., gravel now in the road, cannot be surrendered.
The crucial language from Luzerne Township v. Fayette County, 330 Pa. at 252-3, 199 A. at 330-31, states:
“It is true that, in order to avoid results involving-obvious injustice, the courts of some jurisdictions, including our own, have held that where a municipality or other local agency of government has voluntarily accepted and retained the benefits of a contract which
Looking to the instruction of that decision, and the case law cited therein, it is clear to us that a quantum meruit cause of action is not proper in this case
The rationale of all the cases in this line is that where the underlying contract is found to be invalid because it is ultra vires, improperly ratified by the municipal body, etc., the courts will leave the parties in a status quo posture if at all possible, and will not grant relief to a party which would have the effect of changing the pre-existing status quo. Kreusler v. McKees Rocks School District, 256 Pa. 281, 100 A. 821 (1917).
The logical extension of this proposition, as expressed in Luzerne Township v. Fayette County, supra note 1, is that where the benefit conferred cannot be returned, there is no possibility of returning the parties to the status quo existing at the time of attempted execution of the invalid contract. Further, the cited cases are replete with references to the public policy of the rule, and as the Court stated in Kreusler, albeit referring to a contract that exceeded the then-existing constitutional municipal indebtedness limit rather than an improperly executed contract under Section 802 of the Second Class Township Code, 53 P.S. §65802, as in the instant case, “ [i]t would, in effect, be vitalizing a contract condemned by the constitution [and/or statutes] and policy of the State.” Kreusler v. McKees Rocks School District, 256 Pa. at 294, 100 A. at 824. (Parenthetical added.)
Considering the foregoing precedents, we may not sanction a claim based on unjust enrichment. Thus, the trial court correctly sustained Township’s demurrer to the quantum meruit claim and we need not reach the question of the quantum of damages beyond the $350.00 contractual damages already awarded and affirmed by this Court.
Our first Hess opinion concluded as follows:
“Appellant urges us to agree that the term ‘100 tons more or less’ can be expanded to impose liability on the township for approximately 6,000 tons. In support thereof, it cites Ruth-Hastings G. T. Co. v. Slattery, 266 Pa. 288, 109 A. 695 (1920) for the proposition that a fixed amount ‘more or less’ as stated in the contract does not relieve the vendee of liability for quantities delivered in excess of the stated amount when the parties act in good faith. However, the contract in Hastings called for a number of bushels of wheat, more or less, as the vendee may require. That flexibility is not in this case. No rational person would interpret the term ‘100 tons more or . . .’ to permit approval of liability for the delivery of 6,000 tons.” J. A. & W. A. Hess, Inc. v. Hazle Township, 9 Pa. Commonwealth Ct. at 413-14, 305 A.2d at 413-14.
This conclusion was premised on the record as it then was before us, i.e., without evidence of prior course of dealings. Even assuming arguendo that there was such evidence of record, our result would have been no different, for liability above $350.00 was expressly foreclosed by operation of law when the strictures of Section 802 of the Second Class Township Code were not followed. It was on this basis that damages above $350.00 were foreclosed, for it was as if no contract existed for amounts in excess of $350.00.
Accordingly, we
Order
And Now, this 16th day of September, 1976, the order of the Court of Common Pleas of Luzerne County sustaining the demurrer of Hazle Township to that part of J. A. & W. A. Hess, Inc.’s complaint seeking a quasi-contractual recovery is hereby affirmed.
In Hazle, 9 Pa. Commonwealth Ct. at 411, 305 A.2d at 405, our footnote number 1 expressed the view that Hess had not properly preserved the quantum meruit claim for purposes of appeal but that if properly before us, such a claim could possibly have been meritorious based on Luzerne Township v. Fayette County, 330 Pa. 247, 199 A. 327 (1938). The Supreme Court’s opinion in support of remand concluded that Hess had properly raised the quantum meruit issue after trial by distinct references to it in its brief to this Court. Further, that Court concluded that attempted appeal of the sustaining of the demurrer to the quasi-contractual cause of action, while allowing the parties to proceed to trial on the legal contractual claim, would not have been proper because the reality of the
Our first Hazle opinion set out in toto the factual and legal underpinnings of the invalidity of the contract pursuant to Section 802 of the Second Class Township Code, Act of May 1, 1933, P.L. 103, as amended, 53 P.S. §65802.