15 F. Cas. 214 | U.S. Circuit Court for the District of Connecticut | 1877
This is a motion for a new trial for alleged errors in the charge to the jury. The case is as follows:
Prior to November 1, 1871, the plaintiffs had been contractors for building a portion of the railroad of the defendant between Portland and Willimantic. Other contracts had also been entered into for constructing other sections of the road. The defendant had exhausted its funds, was unable to pay the contractors, and work had been consequently suspended. In this condition of affairs, the legislature of Connecticut, at its May session, 1871, authorized the various towns upon the line of that portion of the new road to guaranty the bonds of the railroad company. These towns, in the fall of 1871, passed sundry' votes, which are hereafter referred to. By the aid of this guaranty the defendant hoped to be able to complete its road. It entered into a contract under seal with the plaintiffs dated November 1, 1871, which was, in substance, as follows: “The plaintiffs agreed to do to the full satisfaction of the chief engineer and board of directors of said company, and according to the plans and specifications of said road, all the unfinished work mentioned under the name of John Lee & Son, in the engineer’s estimate annexed to said contract, including all the bridges, trestlework, masonry, grading ready for ties and rails, laying the ties and rails, and all other work therein specified, and to furnish the materials therefor, and to bring all the sections therein named up to grade, all for the price or sum of one hundred and seventy thousand nine hundred and fifty dollars ($170,950), the same to be paid in installments, as follows: At the end of each month, counting from the - day of -, on which day said work shall commence, there shall be made, by the chief engineer of said company, an estimate of the work which may have been done, and the materials delivered during the month; and the said John Lee & Son shall, within 10 days after the return of such estimate to the office of said company, be paid such proportion of said whole sum of $170,950, as the monthly estimate of work done bears to the whole work hereby contracted to be done by them; and so on, at the end of each month thereafter, until the whole work is completed. And such payments shall be made in bonds of said company at par, bearing interest at seven per cent, per annum, payable semiannually, and indorsed or guarantied by some one of the towns on the line of said road which have recently voted to so indorse or guaranty. All claims for damages for any cause whatever, which either party might have against the other, were canceled and waived, excepting an agreement for the payment of back claims of said John Lee, amounting to $42,500. The plaintiffs agreed to prosecute said work with all diligence, and to complete the same by the first day of May, A. D. eighteen hundred and seventy-two. And the company agreed to make payment of the several installments promptly, as they from time to time became due and payable. And it is further understood and agreed that the installments herein-before provided shall be paid to said John Lee & Sons in the bonds which are to be guarantied by the towns of Portland, Chat-ham, and Hebron, respectively; and when these are used up, then, if more are needed, in bonds to be indorsed or guarantied by the
Sundry contracts, dated November 1, 1871, were entered into by the defendant with other contractors, severally, for the completion up to grade, ready for ties, by April 1, 1872, for definite sums, of sundry sections of the road other than those named in the plaintiffs’ contract, and constituting in the aggregate all the sections not therein named, east of Middletown. These other contracts are substantially like the plaintiffs’ contract, mutatis mutandis, except that they do not provide for completing unfinished work of other contractors. Prior to November 1, 1871, the towns of Middletown, Portland, Chatham, and Hebron, respectively, voted to guaranty the bonds of the defendant to the following amounts, respectively: 8300,000, $102,000, 840,000, and 828,000. The terms of said votes were known by the plaintiffs when said contract' was made. The votes of Middletown and Portland provided that no bonds should be guarantied, except for work actually done, and materials to be furnished the company after the date of the votes, and for interest absolutely necessary to be paid to keep possession of the road, and that no bonds should be guarantied until contracts were entered into for the entire completion, for definite sums, of the road, ready for running cars, between Middletown and Tnilimautic, except for said interest. The Hebron vote provided that bonds were not to be guarantied for interest until the road was completed. Chatham voted to guaranty bonds to be used in the completion of said road on and after such times as it shall have been graded, the track laid permanently, and cars shall have passed over the road from New Haven to the village of East Hampton. The plaintiffs subsequently entered into a contract with B. Richardson for rails, fish plates, switches, frogs, depots, and for all the ballasting of the road, and otherwise for its completion ready for the running of cars thereon, for definite sums to be paid said' Richardson. Under the plaintiffs’ contract, work was done and materials furnished with reasonable dispatch until the month of August, 1872, when, in consequence of the inability of the defendant to pay according to the terms of the contract, work was suspended until December 15,1872, when it was resumed by agreement between the parties, a partial payment having been made in an order for 810,700 in bonds, agreed to be bought of the plaintiffs, and bought for 810,-000 in cash, and the plaintiffs promising to go on' w’ith the work in pursuance of the contract. Work was continued until April 10, 1873, when by a vote of the directors of the company, passed April 8, 1S73, the plaintiffs were notified that the company considered that they had failed to carry out their contract in letter and spirit, and that the contract was at an end, and that the work would be completed by the defendant, which was accordingly done. The plaintiffs thereupon, on April 11,1873, brought their action of general assumpsit, to recover for the sums claimed to be due to them for the value of the work and of the extra work which had been done by them for the defendant. Monthly estimates of the work done by plaintiffs were regularly made down to April 10, 1873, by the chief engineer, and the amounts of such estimates were credited to the plaintiffs on the books of said company. Prior to August, 1872, the plaintiffs were paid by the defendant either in bonds of Portland or of Middle-town. The bonds of Hebron and Chatham were not then ready to be delivered, as the condition precedent to the guaranty had not occurred. All the bonds which Middletown and Portland had agreed to guaranty had been issued and disposed of prior to December 15, 1872. The sums which were estimated as due to the plaintiffs in January and February, 1S73, were paid to the plaintiffs by orders for bonds drawn by said company on some one of the towns which had agreed to guaranty when the conditions of their votes were complied with. These orders, when given, were bought of the plaintiffs by one of the officers of the company at the time the orders were given, as the plaintiffs would not take orders for bonds unless they could turn them into money forthwith. No payments were made upon the estimates of the plaintiffs’ work for March and April, 1873. Prior
The defendant, upon the trial, denied that anything was due upon the contract, or for ■extra work, and claimed that, if anything was due, the sum was reduced to nothing by the damages to which it had been subjected by the plaintiffs’ noneompliance with the contract, which noncompliance compelled a rescission of the contract, and introduced evidence tending to show that, after the work was resumed under the agreement to that effect, of December 15, 1872, the plaintiffs proceeded with intentional and causeless delays, and did their work poorly, and caused great damage by the inefficient manner and slowness with which the work waB conducted. The plaintiffs had a conversation with a majority of the directors of the company, on March 10, 1873, in which they asserted that they should stop work unless they got their pay, and did stop work. The plaintiffs admitted this conversation and stoppage, gave evidence-tending to show that work was resumed after the suspension of about a day. and that the proposed abandonment was because they had not been paid, and that they had not been paid, and that it was impossible for the company to make any payment, which fact the plaintiffs then knew, and that after they resumed they proceeded with dispatch. They also offered evidence to show that the plaintiffs always worked with dispatch, that the delays were caused by the laches of the defendant, and that the work was duly accepted by the chief engineer and directors ■of the company, monthly, as it progressed; that the rescission of the contract was improperly and unfairly made, and with intent to benefit, pecuniarily, certain officers of the company. The defendant introduced Robert G. Pike, who was formerly secretary of the company. Upon cross-examination, — the general object of this part of the m-oss-examination being to show that the company intentionally placed hindrances in the way of the plaintiffs receiving their pay, and also for the purpose of showing that the plaintiffs resumed work after said conversation with the directors, in March, 1873, — the witness was asked by the plaintiffs’ counsel, “Do you not recollect that subsequent to the estimate of March 15, 1872, a batch of suits was brought against Lee, and served upon you, by which the company was garnished?” To this question the defendant objected, on the ground that it called for what should be proved by the records of the courts to which such actions, if any, were brought. But the court admitted the question, and the witness replied, “I have a memorandum of ten suits brought March 25, 1872,” and read his memorandum. To the admission of this testimony the defendant duly excepted. J. F. Fielder testified for the defendant, and stated that he had been a railroad contractor for 40 years. On cross-examination, he was asked if it was not the universal custom of railroad companies, which had made construction contracts involving fills by contractors, to furnish the latter with- necessary borrow pits, when the contract was silent as to which party should furnish them. To this questiou the defendant objected, as seeking to vary the contract in suit by parol, but the court admitted it, and the witness answered in the affirmative, to which ruling the defendant’s counsel then and there excepted. The court subsequently charged the jury that, under the contract, the plaintiffs, and not the company, were bound to furnish all the earth and “borrow pits” necessary to make the fillings called for by the contract. On April 9, 1874, plaintiffs filed with the clerk a special count in covenant as an amendment to the original declaration, setting up the' contract, alleging performance by the plaintiffs, a breach by the defendant, a readiness and willingness to complete the contract by the plaintiffs. A copy of the amendment was served on the defendant. By the statute of Connecticut, counts in assumpsit, debt, and covenant may be joined in the same declaration. Before evidence was taken, the defendant moved that the special count be stricken from the files, and for nothing had, but the court denied the motion, and allowed the count to stand as an amendment to the declaration.
The defendant requested the court to charge th jury as follows; “(1) The plaintiffs cannot recover for any work done or materials furnished under the contract of November 1, 1871, under the general or common counts in their declarations. If they can recover at all for any of said items, it must be under the second count, in which they undertake to set out the contract at length. (2) The plaintiffs agreed to perform their contract to the full satisfaction of the chief engineer and board of directors of the company, and were bound to prove affirmatively that they did so, or else that they were excused from so doing. It is, however, agreed that on April 8, 1873. the board of directors were dissatisfied with the manner in which the plain
The court charged the jury that the plaintiffs, denying that the contract had been broken on their part, and asserting that it had been broken by the defendant, have brought their action of covenant to recover the money due to them upon the contracts, and also damages for such unauthorized abandonment, and have also joined counts in assumpsit to recover for the value of the work actually done, and the value of the extra work which was not embraced in the contract. If any extra work was done by the direction of the chief engineer and the directors, which was accepted and sanctioned by the engineer and directors, the plaintiffs can recover for so much as such extra work was reasonably worth under the common counts. And the court further charged, upon the question of recovery upon the counts in assumpsit, that, if work is not performed according to the contract (and it was manifest that the terms in regard to time had not been complied with), the work is not to be paid for at all, unless it has been sanctioned or accepted by the contracting party, in which case the sum which is reasonably due is the amount of payment, and the contract price is to be considered by the jury, and be an important element in determining what the work and labor is worth. When the contract has been in good faith fulfilled (until its further fulfillment has been prevented by the unauthorized act of the other party), but has not been fulfilled in the manner or not within the time prescribed by the contract, and the other party has sanctioned or accepted the work, the plaintiffs may recover upon the common counts in assumpsit. The converse.of the proposition is true. In such case the defendant is entitled to recover for the damages it has-sustained by the plaintiffs’ deviation from the contract, both as to the manner and time of performance, not induced by the defendant. The work was to be done to the full satisfaction of the chief engineer and the board of directors, which means their full satisfaction, not improperly or unjustly withheld; for the contracting party cannot unreasonably and unjustly refuse to approve work which was, in fact, well done, and then be justified in refusing to pay. The first question of fact for their determination, the work not having been actually done according to the contract, is. was it sanctioned and accepted by the chief engineer and the-board of directors, and was the completion of the contract prevented by the unauthorized act of the company? If the work was, from time to time, as it progressed, and at
Upon the plaintiffs’ claim for damages for the rescission of the contract by the defendant, the court submitted to the jury the question whether the rescission was improperly made, and, upon the claim of the defendant that one reason for the rescission was because work was stopped by the plaintiff on March 10, 1873, charged that the defendant was bound to pay promptly the monthly estimates in guarantied bonds. They were not obliged to take pay in orders upon the towns. The defendant was bound to furnish bonds. If the defendant did not pay according to the contract for the work which was done according to the contract, or which had been accepted and sanctioned by the company in March, 1873, or if the defendant had paid out all the bonds, and had no bonds to give the plaintiffs, and the plaintiffs knew that fact, the plaintiffs were not bound to go on and complete the contract when the defendant had no bonds to give them, and the plaintiffs knew it In regard to the work mentioned in the contracts of Edwards and others, which are referred to in the plaintiffs’ bill of particulars, the court charged that, if the jury found that any of these contractors failed to fulfill their contracts, the plaintiffs were not bound to take any such contract up and fulfill it, in lieu of such delinquent contractor, unless the defendant first gave them reasonable notice of the default of the latter, and demanded the fulfillment of such contract by the plaintiffs; and if the defendant had accepted the work of such other contractor, notwithstanding its deficiency, and had paid him off in full, this would operate as a discharge of the plaintiffs from any liability to make good such deficiency.
1. The question which arises upon the first request is one of pleading, viz. that the plaintiffs cannot recover upon the common counts for any work done or materials furnished under the contract, which was under seal. In the same connection may also properly be considered the point that a count for breach of covenant cannot by amendment be added to counts in assumpsit for the value of work accepted by the defendant which was originally undertaken under the contract set forth in the count in covenant, and for extra work performed at the defendant’s request. When the action was brought, it was admitted and was patent that the terms of the contract which required a completion of the work on April 1, 1872, had not been complied with, and that the contract also required that payment of the work as it progressed should be made in monthly installments, and that such payment had not been made; and it was claimed by the plaintiffs, and may now be considered as established by the verdict, that all work which had been done either under the contract, or as extra work prior to the rescission of the contract by the defendant, had been sanctioned and accepted by it. Por the value of the work which had thus been done and accepted, an action of general assumpsit was brought. The cases of Dermott v. Jones, 23 How. [64 U. S.] 220, 2 Wall. [69 U. S.] 1, and Jewell v. Schroeppel, 4 Cow. 566, seem to have settled the doubts which formerly existed in regard to the right of a contracting party to bring as-sumpsit under the circumstances stated, when a sealed contract had been originally entered into. These cases hold that when work is not completed within the time specified in a building contract under seal, if the plaintiff has subsequently, to the time specified for completion, continued in good faith, with the permission of the defendant, to do the work specified in the contract, and also to do extra work, and the work thus done has been accepted, the work is to be paid for, and, the contract no longer being execu-tory, a recovery can be had in an action of indebitatus assumpsit upon an implied promise on the part of the defendant to pay such a sum as the services which have been performed and the benefit which has been conferred are worth. In Dermott v. Jones, 2 Wall. [69 U. S.] 1, the court say: “While a special contract remains executory, the plaintiff must sue upon it When it has been fully executed according to its terms, and nothing remains to be done but the payment of the price, he may sue on the contract, or indebitatus assumpsit, and rely upon the common counts. In either case the contract will determine the rights of the parties. When he has been guilty of fraud, or has willfully abandoned the work, leaving it unfinished, he cannot recover in any form of action. Where he has in good faith fulfilled, but not in the manner or not within the time prescribed by the contract, and the other party has sanctioned or accepted the work, he may recover upon the common counts in indebitatus assumpsit. He must produce the contract upon the trial, and it will be applied as far as it can be traced; but if, by the fault of the defendant, the
2. The defendant claims that the plaintiffs, having agz-eed to perform their contract to the full satisfaction of the chief engineer and board of directors, were bound to prove affirmatively that they had done so, or that they were excused from doing so; and that the board of directors having been dissatisfied with the manner of the plaintiffs’ performance, and having notified them accordingly, and having considered the contract as at an end, this action on the part of the board, whether just or unjust to the plaintiffs, is conclusive against them. This request is based upon the principle that when a contracting party has agreed to be bound by the determination of the co-contracting party or of a third person in regard to the value of the work, or its conformity with the requirements of the contract, or the diligence with which the work is being prosecuted, such determination is final, because it is the exercise of a power reserved in the contract, and is the agreement of the parties, unless the person making the decision is guilty of bad faith. The cases of Woodruff v. Hough, 91 U. S. 596; Philadelphia, W. & B. R. Co. v. Howard, 13 How. [54 U. S.) 307; Ranger v. Great Western Ry. Co., 5 H. L. Cas. 72; Scott v. Liverpool, 3 De Gex & J. 334; Stadhard v. Lee, 3 Best & S. 354,—are examples of this doctrine. The question, however, which is here to be considered, is not in regard to the correctness of this principle, which is well settled by the cases' cited, but it is in regard to the construction of this contract, and whether the contract made the satisfaction of the defendant, in the absence of bad faith, conclusive upon the plaintiffs, and a condition precedent to their right to recover. The rules of construction of contracts which are claimed to reserve in one of the contracting parties the final power of determination as to the value or character of the work which is being done, or as to the diligence with which it is performed, are suggested in two recent English cases. “The duty of a court in such cases is to ascertain and give effect to the intention of the parties as evidenced by the agreement, and though, where the language of the contract will admit of it, it should be presumed that the parties meant only what was reasonable, yet, if the terms are clear and unambiguous, the court is bound to give effect to them, without stopping to consider how far they may be reasonable or not.” Stadhard v. Lee, 3 Best & S. 364. “A power which is,
3. The third and fourth requests were in regard to the construction of that portion of the contract which provides for monthly payments in bonds. The request is based upon this state of facts: The contract provides for payment in monthly payments, which payment is to be be made “in bonds which are to be guarantied by the town of Portland, Chatham, and Hebron, respectively, and, when these are used up, then in bonds to be guarantied by the town of Middle-town.” By .the terms of the vote of Chat-ham, no bonds were to be guarantied until the road was completed. The Portland and Middletown bonds, except for interest, were not to be guarantied until contracts ■ had been made for completion of the road. No Hebron bonds were to be guarantied until like contracts had been made. This event might not occur until after the plaintiffs’ work had been wholly or partially completed. The payments were actually made in Portland and Middletown bonds, which were issued, and were ready for delivery at the time of the monthly estimates. The defendant insists that, inasmuch as Chatham bonds could not be issued until after the completion of the road, and Middletowr bonds were not required to be paid until the bonds of the other towns were used up, the defendant was not in default for nonpayment. The corporation had prior to November l, 1871, entered into a contract for the construction of the road with divers persons, all which contracts had been broken by reason of the inability of the defendant to make payments. It had now undertaken to pay for the road building and track laying in guarantied bonds, and to pay in monthly installments as the work progressed. The provision for monthly payments was a most important one to the plaintiffs. It is hardly reasonable to construe the contract so that it shall provide that the defendant should not be in default in not making monthly payments, especially as its duty so to pay had been uniformly recognized. It is more in accordance with the ordinary rules of construction to harmonize the different provisions of the contract so as to carry out the plain and obvious intention of both parties. The construction which the court gave to the contract was the one which the parties had practically placed upon it, and which they followed at and after the execution. By this construction, the plaintiffs were to be paid their monthly installments in bonds of Portland or Chatham or Hebron, which were ready for delivery at the time when the payments were, respectively, due, and if such boDds, ready for delivery, were exhausted, then in bonds of Middletown. The Middle-town bonds were to be given if others were not ready or did not exist, and seem always to have been ready.
4. The fifth, sixth, and seventh prayers are based upon the theory that, because the town votes provided that no bonds should be guarantied, until contracts had been entered into for the entire completion of the
5. The eighth prayer requests the court to charge, in substance, that the plaintiffs were answerable for the default of any of the other contractors, upon other sections without notice of such default. It is sufficient to say that such was not the intention of the parties as manifested in the contract. The plaintiffs were not sureties for the other contractors. They were to do unfinished work at the same prices, and upon the same terms and conditions, which had been agreed upon with the other contractors, but were not to do the work without payment by the defendant. Whether such imperfect or unfinished work had been accepted and paid for in full, and, if it had been paid for, whether the defendant wished to have it ■ completed and to pay the plaintiffs, and, in general, all the facts in regard to any default of the other contractors, were, peculiarly within the knowledge of the defendant, and not within the knowledge of the plaintiffs.
G. The defendant excepts to the charge of the court that the failure of the defendant to pay the monthly installments, or their inability in fact to make any payments, coupled with the plaintiffs’ knowledge of such inability, justified the plaintiffs in suspending work on March 10th. Contracts of this character, which provide on the one part for the completion of work by a specified time, and which also compel monthly payments as the work progresses, do not compel the party who performs the labor to complete the contract, after the other party has been guilty of a default in his payments. The contractor can thereupon cease work, and can recover for the value of the labor actually done. “The defendant having defaulted on a payment due, plaintiffs are not required to go on at the hazard of further loss.” Phillips & Colby Const. Co v. Seymour, 91 U. S. 646; South Fork Canal Co. v. Gordon, 6 Wall. [73 U. S.) 561. In this case the defendant has no money, and was in any event only able to pay in bonds. It is admitted that it had ceased to pay the plaintiffs after December, 1872, except in orders, and prior to March 10, 1873, it had disposed of all the guarantied bonds, so that it could not comiffy with its agreement Payment of the plaintiffs’ contract by the defendant was impossible. Both parties had full knowledge of this fact. In this state of things, the law does not compel a contractor to complete his contract, when nonpayment from the other party was not only probable, but certain.
7. The admission of Fielder's testimony became immaterial, by the charge, adverse to the plaintiffs’ position, that the contract was silent as to the party by whom “borrow pits” were to be furnished. Greenleaf’s Lessee v. Birth, 5 Pet [30 U. S.] 135.
8. The exception to the testimony of the defendant’s secretary. The general object of the cross-examination was to show the active participation of the defendant in efforts to prevent the plaintiffs from receiving their pay. The special object of the question which was objected to was to show the relation in point of time of a fact, which was not denied, to another occurrence, and the witness was asked, in substance, “Do you not recollect that, subsequent to a named date, a batch of suits was brought against Lee, wherein the company was factorized?” The existence or contents of the writs were not the subject of the inquiry, but the object was to show, upon cross-examination — First, that the company instigated suits; and', secondly, that they were brought after a certain date. Upon cross-examination, the question was properly allowed. Williams v. Cheesebrough, 4 Conn. 356. The motion for a new trial is denied.
