154 Iowa 660 | Iowa | 1912
On March 17, 1908, in proceedings pending before the board of supervisors of Webster county .for the improvement of a certain drainage district, the appellant John Nelson became the successful bidder for the construction of a ditch according' to designated plans and specifications' prepared by the county’s engineer. Soon thereafter Nelson entered upon the work, but the written contract therefor was not executed until a later date as hereinafter shown, during which period the only written evidence of -the agreement was in the bid of Nelson, its acceptance by the board of supervisors and possibly the advertised terms of the letting of the contract. It seems to bo conceded, however, that the bid was made and accept
Know all men by these presents: That we, John Nelson, of Ft. Dodge, Iowa, as ^principal and the United States Fidelity & Guaranty Company of Baltimore, Maryland, as sureties, are held and firmly bound unto the board of supervisors of the county of Webster and state of Iowa, for drain district No. 43 in the penal sum of $3,741.00 lawful money of the United States, well and truly to be paid to the said board of supervisors as sureties in trust for drain district No. 43. The condition of the above obligation is such that, whereas, the above named John Nelson, agrees to construct county drain No. 43 according to a contract this day signed and bearing even date herewith: Now, therefore, if the said John Nelson shall well and faithfully perform and keep all the conditions of said contract on their part to be kept and performed, and shall .well and truly protect the interests of said drain district in performance of their contract, then this bond is to be void, otherwise to remain in full force and effect. Witness our hands this 22d day of July, 1909. John Nelson. The United States Fidelity & Guaranty Company.
The petition sets out the substance of the facts hereinbefore recited. It is further averred that at-the time the contract was forfeited the work of constructing the ditch was somewhat less than half done, that the amount actually earned by Nelson was $6,678.19, of which sum $1,607.96 is still in the hands of the county treasurer, and is applicable to the payment of the damages occasioned by Nelson’s breach of his contract. But it is averred that said damages far exceed said guaranty fund for that upon the reletting of the work the best bid offered was $13,400, and the contract was let upon that basis, and that, after making due allowance for credits and deductions to which defendants may be entitled, there remains due the plaintiff from Nel
Appellants take the position that, even if this be true, the contract entered into by the parties has limited the recoverable damages to $10 per day, and that the utmost extent of the period to -which this stipulation can be applied is the time from January 1, 1910, when Nelson defaulted in his contract and March 9, 1910, when the work was relet to another person. At first blush, this defense seems plausible, but it will not bear analysis. A contract such as we are here dealing with may be violated by the contractor to the injury of the other party in different ways. Nor example he may fail to do the work according to the specifications which he has promised to observe in constructing the improvement, or he may construct it with all due fidelity to the specifications and fail to complete the job within the agreed time.
Generally speaking, it is entirely competent for the parties to a contract to provide in express terms what shall be the measure of damages for a violation of any one or all of its provisions, or they may agree that the party injured by the contractor’s default shall at his option have two or more remedies. It-is not an unusual thing in contracts for the erection of buildings to .provide that, if the work be not completed within a sjsecified time, the builder shall pay as liquidated damages for such default a stated sum of
Had this latter alternative been adopted, then, when the ditch was finally constructed by the contractor, his liability to pay the stipulated damages would be a pertinent question, but plaintiff chose to pursue the other course. Immediately upon the default becoming apparent, it availed itself of its statutory right, and proceeded to take the work out of Nelson’s hands, and to let it to another. In so doing it abandoned its right to rely upon the agreement for liquidated damages hy putting an end to the contract and proceeding by other means to complete the ditch. In other words, recurring to the illustration made use of above, .the county occupies precisely the situation of the owner whose building not being completed in contract time ousts the contractor, and proceeds to do the remainder of the work himself, or hy another contractor. The damage to which the plaintiff is entitled is not compensation for delay. There had been substantially no delay beyond the day named in the extended cqntract when plaintiff began to move for the enforcement of its right to terminate the contract relation with defendant and to recover damages for his failure to construct the ditch as agreed. The measure of such recovery is neither obscure nor difficult. It is not necessarily determined by the figure at which the remainder of the work was relet. It is not to be augmented by penalties. No claim is made that so far as he had' gone the work of Nelson was not reasonably well done. The thing which he had left undone was the construction of a certain definite proportion of the ditch described in his contract. The amount, then, for which he should be held responsible, is the reasonable and fair costs of the performance of the remnant of work which he ought to have done, but did not do, less the unpaid balance of the contract infice, which balance should, -of course, include the moneys
The case of Wolfe v. Railroad Co., 64 Iowa, 387, on which appellants rely, is not in point upon the record before us. In that precedent which arose upon a. contract for construction of a railroad grade, the company undertook to pay the contractor ninety percent of the engineer’s estimates as the work progressed. No penalty or liquidated damages for mere delay was provided for, but it was agreed that upon failure of the contractor to begin the work promptly, or to prosecute it with an adaquate force, or to complete it in the time fixed, or for neglect or omission in performing the work according to specification, the engineer was authorized to terminate the contract, and in such case the reserved ten percent of the money earned by the contractor should be retained by the company as liquidated damages. The contractor failed to perform the work in time, and upon notice hy the engineer the contract was forfeited. Action was then brought by the contractor to recover the reserve which had been retained by the company, and it was adjudged that the agreement for liquidated damages was valid and enforceable, and a recovery was therefore denied. The contract in the case at bar, as will be readily noted, is altogether different. The agreement here found for liquidated damages has reference to delay alone, while the one in the Wolfe case covered all damages of every kind which might result to the railroad company from the nonfulfillment of the contract on any respect.
IV. We have not attempted to pass upon the legal proposition whether the board of supervisors in letting a contract under the drainage statute may lawfully stipulate the amount of damage recoverable for failure of the contractor to carry out his agreement. Its determination has not seemed necessary to the disposition of the case pre
The conclusions announced in the foregoing paragraphs upon the merits <3f the case are in harmony with those reached by the trial court, and the decree appealed from is therefore affirmed.