On July 7, 1971 the plaintiff, Loyal Erectors, Inc., initiated proceedings against the principal defendant, Hamilton & Son, Inc. (Hamilton), for the recovery of $40,301.58, plus interest, which the plaintiff asserts Hamilton owes it by virtue of certain contractual obligations. In the prosecution of its claim, the plaintiff, pursuant to Rule 4B, M.R.C.P., on July 15, 1971 served a trustee summons on Robert C. Ford, Inc. (Ford), requiring the latter to show cause through verified disclosure why execution issued upon such judgment as the plaintiff may recover against Hamilton, if any, should not issue against the credits, which, on the date of service, Hamilton had with Ford and which Ford had in its possession as trustee of Hamilton, to the value of the plaintiff’s claim, together with a reasonable allowance for interest and costs. 14 M.R.S.A. § 2601.
In the Court below, the principal defendant (Hamilton), by motion properly served on the plaintiff, sought the discharge of Ford as trustee, on the ground that the principal defendant’s credits with Ford at the time of service of the trustee process were contingent claims only and not absolute liabilities. 14 M.R.S.A. § 2602(4). Ford’s discharge as trustee is the basis for plaintiff’s appeal. We deny the appeal.
The decision of the Presiding Justice rested on facts which Ford imparted in its disclosure under oath pursuant to 14 M.R.S.A. §§ 2608, 2709. The disclosure was neither attacked nor contradicted. The plaintiff could have raised an issue in respect thereto by alleging and proving any facts material to the question of chargea-
The disclosure is the statutory answer which presents the issues of fact upon which the liability of the trustee depends in reference to the business relations with the principal defendant. It is upon those facts as disclosed by the. trustee’s sworn statements that the court__mus.t decide whether the alleged trustee .JhaiL, credits of the principal defendant in its possession of such a nature and under such conditions as made them_ available to the plaintiff in trustee process. Hibbard v. Newman, 1906,
The disclosure reveals that Ford had entered into two contracts with Hamilton. Under the contract of April 21, 1969 Hamilton agreed to install a complete ventilation and duct work system in the high school building at Cape Elizabeth, Maine, in accordance with specifications and drawings prepared by a named architectural firm. The price which Ford promised to pay Hamilton for the complete job was $104,500.00. Payment of this money was to be made as the work progressed “in the amount of ninety percent (90%) of the satisfactorily completed work.” The contract further provided that “[t]he retained percentage shall be paid within ninety-two (92) days of the final approval and acceptance of the building by the Architect.” The second contract executed November 24, 1969 called for the installation of a complete ventilation system in accordance with specifications and drawings prepared by another firm of architects. It was designed/for the Waterville Osteopathic HospitaPm Water-ville, Maine. This contract carried the price of $36,061.00 with a similar progress payment clause, the retained percentage, however, to be paid within 90 days “of the final approval and acceptance of the building by the Architect.”
Ford maintains that, at the time of service of the trustee summons on July 15, 1971, it had not in its hands and possession any goods, effects or credits of Hamilton subject to trustee process, even though Hamilton’s requisition for payment of the sum of $2,174.85 under the first contract and the sum of $3,334.90 under the second contract for alleged completion of the work had not been paid and the retained amount by the prime contractor, Fred I. Merrill, Inc. (Merrill) under terms similar to those provided in the contracts between Hamilton and Ford was in excess of Hamilton’s requests for payment.
The trustee’s sworn assertions further disclose that neither building at the time of service of the trustee process had been finally approved and accepted by the architect.
The issue on appeal is whether the Justice below was correct in discharging Ford as trustee pursuant to 14 M.R.S.A. § 2602(4) which provides:
“No person shall be adjudged trustee: [b]y reason of any money or other thing due from him to the principal defendant unless, at the time of the service of the summons upon him, it is due absolutely and not on any contingency.”
Initially, we recognize that the ruling discharging the trustee was interlocutory. The present appeal, however, is not premature. The .order discharging 'the trustee is subject to an immediate appeal as an exception to the “final judgment” rule, because “great and irreparable toss”
Did the principal defendant, Hamilton, have a noncontingent claim against the trustee, Ford, at the time of service upon the trustee? In order to answer this ultimate question, we must determine whether the principal defendant’s failure to secure “the final approval and acceptance of the building by the Architect”, which the contract between the parties required, caused the retained percentage moneys to come within the statutory exception precluding trustee process, on the ground that, prior to the approval and acceptance of the building by the architect, there is no money or other thing “due absolutely and not on any contingency” within the meaning of 14 M.R.S.A. § 2602(4).
This determination must be made as of the time the trustee process was served, since the validity of the trustee process depends upon the state of facts as they existed at that moment. Holmes v. Hilliard, 1931,
It should be further noted that the statutory reference to money or other j thing due absolutely and not on any contingency does not mean that the amount of the debt must be certain, but rather, that the monetary obligation itself is absolute and not contingent. The mere fact that the amount due under an absolute indebtment may be unascertained or in dispute will not defeat a trustee process.
As stated in Davis v. Davis, 1862,
“The contingency under this section [of the statute, as settled in Dwinel v. Stone, 30 Maine, 384], ‘is not a mere uncertainty as to how the balance may stand between the principal and the supposed trustee; but it is such a contingency as may preclude the principal from any right to call the supposed trustee to settle or account.’ ”
See also, Wilson v. Wood, 1852,
We must have in mind, additionally, the provisions of 14 M.R.S.A. § 2628 to the effect that “[a]ny money or other thing due absolutely to the principal defendant may be attached before it has become payable, but the trustee is not required to pay or deliver it before the time appointed therefor by the contract.”
In Davis, supra, this Court ruled that the preliminary proof of loss required by a fire insurance policy was a condition precedent to the right of the insured to recover, and, as such, within the exclusionary clause of the trustee process statute, since the liability of the insurer does not become absolute, unless the preliminary proof of loss, as provided in the conditions of the policy, is furnished.
In Wilson, supra, it was held that, where the contract called for the payment of a commission when a particular note was collected, there existed no absolute indebtedness under the trustee process statute until after the note had been collected. Until that fact had taken place, there was only a contingent liability.
In Jordan v. Jordan, 1883,
In Holmes v. Hilliard, supra, the contract provided for the purchase and sale of so much of the principal defendant’s crop of sweet corn as should be approved as to quality by the supposed trustee, with payment for all the corn so received within sixty days from the close of the canning
When, by the terms of the contract, the price was payable upon the completion of the work and there was no acceptance of the work by the trustee, the use of trustee process prior to the completion of the contract was premature, as there was nothing due, and “non constat that there ever would be.” Otis v. Ford, 1866,
A widow’s allowance, resting as it does in the sound discretion of the Judge of Probate, is not subject to trustee process prior to its actual adjudication, because, prior thereto, it is a mere contingent right. Hussey v. Titcomb, supra.
From a consideration of these cases, it appears that the potential debt to accrue out of a special contract may be characterized as contingent and not absolute, if the condition upon which the price is payable is deemed to be a condition precedent.
Whether the condition attached to the payment of the price be a condition precedent or subsequent depends upon the intention of the parties to the contract, to be determined by considering not only the words of the particular clause, but also the language of the whole contract as well as the nature of the act required and the subject matter to which it relates. Bucksport & Bangor Railroad Company v. Inhabitants of Brewer, 1877,
In Bucksport & Bangor Railroad Company, supra, the condition in a subscription contract, which required that the road to be built “shall be located through the town of Brewer, satisfactory to the selectmen of said town,” was viewed by the Court as intended and understood by the parties as a condition precedent and failure strictly to perform the same precluded any right of action by the plaintiffs.
In all cases where some person is agreed upon by the parties, in the contract, to examine and determine the character, quality, or quantity of the work done,
such examination and decision are conditions precedent to any right of payment,
and must be alleged and proved in order to maintain an action upon the contract. Veazie v. City of Bangor, 1863,
In Lynch v. Stebbins, 1928,
“Assuming that the contracts had been so far performed as to justify the plaintiff in treating them as substantially executed, as I am inclined to think they were, yet the final payment for the work was to be made when it was completed and a certificate of the architects to that effect obtained. The parties have seen fit to make the production of such a certificate a condition precedent to the payment. The plaintiff is as much bound by this part of his contract as any other. It is not enough for him to bring his action and say that he has completed the work which he undertook to do. He has agreed that the architects named should decide whether the work is completed or not. He cannot now withdraw the decision of this question from them and refer it to the determination of a legal tribunal.”
In Daily v. Jordan & Trustee, 1848, Mass.,
In Hanley v. Walker, 1890,
Where progress payments were payable under a construction contract to the extent of ninety percent of the amount of work done in accordance with schedule prices to be fixed by the engineer and upon the estimate and certificate of the engineer, our Court, in Ware v. Gowen, 1876,
“[I]t is obvious from the situation of the parties, as well as from the whole scope of the contract itself, that it was intended that the 90 per cent stipulated to be paid monthly, should be so applied as to enable the contractor to prosecute and complete the work for which he had contracted.” (Emphasis supplied.)
The Court further said:
“That amount [earned in each month] becomes due, absolutely, on the first day of each month. The sum then due, is determined, specifically, by the engineer’s certificate.”
But the Court in
Ricker,
quoting from Williams v. Androscoggin & Kennebec R. R. Co., 1853,
The parties to the instant building contract had dissimilar purposes in mind when they conditioned, upon the architect’s certificate of approval, the right to receive both, 1) progress payments at periodic intervals of performance and 2) the final payment of the retainage fund at the end of the construction. Progress payment clauses are inserted in building contracts mostly for the protection of the contractor who is assured of periodic instalments of cash moneys with which he can continue performance of his contract and save himself from the embarrassment of extended credit and the costs thereof. True, the other party may be benefited incidentally by reason of the timely performance of the work, the avoidance of any breaches and the consequential inconveniences arising therefrom. On the other hand, the conditioning of the final payment of the retain-age money upon the architect’s certificate of approval is solely for the protection of the builder or owner; it is a substantial leverage to assure strict performance of the
For such reasons, we hold that the architect’s certificate of approval was a condition precedent to the right of the principal defendant to receive the retain-age moneys, and since, at the time of the service of the trustee process, such certificate had not yet been obtained, the unpaid retained moneys under the contract were not a debt due absolutely, but only contingently, and the decision of the Court below discharging the trustee was correct.
We note that the progress payment clause, in the instant case, provided that “[pjartial payments will be made by the Contractor to the Subcontractor as the work progresses in the amount of Ninety percent (90%) of the satisfactorily completed work” (emphasis added) and, to the extent of the underscored terminology, might be considered different from such clauses as this Court dealt with in Ware, Ricker and Williams. Therefore, we intimate no opinion as to the proper construction of such a clause which is not before us in this case.
It is contended, however, that an action in quantum meruit could have been brought by Hamilton against Ford to prevent unconscionable and unjust enrichment on the part of Ford, notwithstanding Hamilton’s failure to secure the architect’s certificate of approval and, by reason thereof, this Court should hold that the retained money was due absolutely and not on a contingency, contrary to our present ruling.
We fully agree with the established general rule that, subject to certain exceptions, a party is not chargeable in trustee process, with respect to credits, unless he is liable in an action to the principal defendant. Stowe v. Phinney, 1886,
Assuming, as contended, that an action based on principles of unjust enrichment sounding in terms of “quantum mer-uit” formulation were maintainable by the principal defendant, Hamilton, against the trustee, Ford (but see, Veazie v. City of Bangor, 1865,
We do recognize that the strict rules of the common law which required, as a condition precedent to the right of recovery, full performance of all the material terms of a contract, and especially building contracts, where the defendant, usually the owner, was practically forced to accept the result of the work, have been relaxed. Relief has been granted on equitable principles, when services have been rendered or materials furnished in an honest endeavor to perform the special contract, but the performance has fallen short of fulfilling the express terms of the agreement, and the other party has received a windfall of some value. See, Skowhegan Water Company v. Skowhegan Village Corporation, 1906,
But this Court, in Viles v. Kennebec Lumber Company, 1919,
The burden is upon the plaintiff to show that the trustee should be charged. Krogman v. Rice Bros. Co., 1922,
The entry will be
Appeal denied.
All Justices concurring.
Notes
. 14 M.R.S.A. § 2710. Disclosure deemed true
“The answers and statements sworn to by a trustee shall be deemed true in deciding how far he is chargeable until the contrary is proved, but the plaintiff, defendant and trustee may allege and prove any facts material in deciding that question.”