143 F. 86 | 7th Cir. | 1906
after stating the facts as above, delivered the opinion of the court.
In sustaining the partial demurrer and in entering a decree upon the master’s report, the court adopted appellees’ contention that the contract between appellants and the receivers was void for lack of mutuality because the receivers were not bound to take and pay for the 100,000 cubic yards of stone ballast.
The contract between appellants and the receivers was not deprived of mutuality by the provision that the receivers’ engineer should be the arbiter of controversies respecting quality, amount, or time of deliveries, and that the appella.nts should have no right of action except such as might be found to exist under the final certificate. Such provisions are common in building and construction contracts. The architect or engineer is required to act in perfect good faith in making his certificate; and, if he does not, the builder or contractor may recover without the certificate. 3 Page on Contracts, art. 1467.
The stone company assumed Blue’s obligations to appellants. But
There was no adequate remedy at law. True the appellants might have retaken the machinery under their reservation of title as a security for the debt. But the value of second-hand machinery, less wear and tear, would not be likely to equal the purchase price plus interest. As the agreement to pay the purchase price was unconditional, appellants had the right to waive the return of the machinery, treat the contract as an executed sale, and recover the agreed price. 1 Mechera on Sales, art. 615. It is also true that appellants might also have prosecuted an action at law on Blue’s $5,000 bond. But the unpaid balance of the purchase price of the machinery and supplies was $6,533.01, without interest; and this leaves out of view the items of damage to which the demurrer was sustained. Plainly the only remedy that was adequate to the situation was to bring all the matters into one suit in equity.
This equitable right was not destroyed by Blue’s joining the stone company in the attempted rescission. Their action was wrongful, was an attempted fraud upon appellants, and from.it no equitable rights should accrue to them or either. Further, as between appellees, there was no attempt by the stone company to rescind its assumption of Blue’s obligations. Their notice was on the basis that Blue had incurred no obligations. And, finally, if the notice were to be construed as a rescission by the stone company of its obligations to Blue, there was no consideration for the release, and in an action at law by Blue against the stone company on its assumption the nudum pactum would be no defense.
The balance of the purchase price of the machinery and supplies was to be paid in monthly installments. But when appellees, on August 11, 1900, repudiated the contract, they committed a breach on account of which appellants were entitled to sue at once. Roehm v. Horst, 178 U. S. 1, 20 Sup. Ct. 780, 44 L. Ed. 953. On that part of the complaint which was answered appellants are entitled to $6,-533.01, with 6 per cent, interest from August 11, 1900, less credits, as partial payments, of the amount received by appellants on account of the stone company’s partial performance of the contract with the receivers and the $4,002.34 left in appellants’ hands on March 4, 1901, as the proceeds of the caretaker’s sale.. .
The demurrer to parts of the bill should be overruled and appellants permitted to show the amount of legal damages, if any, which they have sustained by the stone company’s failure to complete the contract with the receivers.
No part of the costs in the way of the caretaker’s charges and expenses should have been taxed to appellants. The general costs
The decree is reversed, with the direction to proceed in accordance with this opinion.