64 Iowa 380 | Iowa | 1884
The petition sets out the contract between the parties, which is in writing, and alleges that in pursuance of the contract plaintiff performed work and labor to the amount of $30,103.45, and that there remains due therefor the sum of $4,500, for which amount, with interest, they ask judgment. They also ask for the establishment and enforcement of a mechanic’s lien on the section of road on which said work was done.
The defendant’s answer admits the making of the contract, and that plaintiffs performed work and labor thereunder to the amount charged in the petition.
■ And it is alleged therein that defendant has paid plaintiffs on account of said work the sum of $26,467.87. It is also alleged that plaintiffs, having failed to prosecute the work with an adequate force, as required by the contract, and
The plaintiffs, in their reply, admit that they did not complete the work within the time specified in the contract, but allege that their failure in this respect was occasioned by the fault and neglect of the defendant; that it neglected to furnish timber and materials for the bridges on said road, and also neglected for a long time to procure the right of way for its railroad, and that, by reason of this neglect on its part, the work was greatly delayed and hindered. They also allege that defendant, without their consent, changed the line and grades of its road, after the contract was entered into, whereby the amount of work' necessary to its completion was greatly increased. They also charge that defendant, by its employes, published and reported among the laborers employed by them
They also allege that there was an accounting and settlement between the parties, in which it was mutually agreed between them that they should suspend work upon the contract, and leave the same in the hands of defendant, and that all differences between the parties regarding the non-complc■tion of the work within the time specified should be settled, and no claim made by either party for any alleged failure to comply with the terms of the contract, and that the work then done should be computed and paid for; and that said work was then measured and computed, and the amount charged in the petition was found to be due them therefor. ’
I. The contract was entered into on the eleven th day of April, 1881. The work which plaintiff undertook to perform was the construction of all the earth work or grading required by defendant’s engineer on the extension of its railroad north of Tara. The contract provides that the work should be finished according to the direction of the engineer and his assistants, and in conformity with the specifications which were embodied in the contract. It also provided that the work should be commenced by plaintiffs within ten days from the date of its execution, and should be completed on or before August 1, 1881, but that the first ten miles thereof should be finished on or before July 20. It also contains the following provisions: .“Payments shall be made in the following manner, viz.: Once a month an estimate shall be made of the relative value of the work done, to be computed by the engineer, and within twenty days of said estimate the party of the first part (defendant) shall pay to the parties of the second part ninety per cent of said estimate. When all the work is completed according to the specifications, and in ac
The evidence shows that plaintiffs entered upon the work about the first of May, and that they continued to work until about the ninth of September following, when they quit the work finally. At that time less than one-half of the work bf grading said railroad was completed. On the second of September one member of plaintiffs’ firm had an interview with the president of the defendant’s company, at which its chief engineer was present. At this meeting it was agreed that plaintiff's should continue on the work for a few days, until
It appears from the evidence that on more than one occasion, while plaintiffs were engaged on the work, their attention was called by the officers and employes of defendant to the inadequacy of the force employed by them on the work, and they were requested to increase it; and we are entirely satisfied that the only reason defendant had for desiring to terminate the contract at the time it was .terminated was the dissatisfaction whieh its president and chief engineer.felt on account of the slow progress which plaintiffs had made in prosecuting the work, and the doubts which they entertained as to whether they would make any better progress in the future.
That defendant had the right- to terminate the contract at that time cannot be doubted. The whole of the work was to have been completed a month before that, whereas but little more than one-third of it was completed at that time; andón the ten miles, which were to have been completed by the twentieth of July, not more than one-half the work was then done, and, under the evidence, the matters pleaded in the reply afford plaintiff no excuse for the delay. There was some delay, it is true, on the part of defendant in procuring bridge timber, and in proeui’ing the right of way through one farm, but this in no manner interfered with the general work of grading the road. There was some change made in the line and grades after the contract, which undoubtedly had the effect to increase the amount of work necessary to be done in completing the road; but this was allowable by the terms of
That the work was greatly impeded by the character of the weather is doubtless true, but this was a contingency against which no provision was made in the contract, and it consequently afforded plaintiff no excuse for the delay.
After the contract was terminated, defendant paid out a large amount of money to sub-contractors under plaintiffs, and to parties who had jierfonned labor for them on the work. It was authorized by the contract to make these payments. But it was admitted on the trial in the circuit court that the work don.e by plaintiffs, at the rates provided for in the contract, amounts to $3,492.9é more than the whole amount of the payments made by defendant thereon, and the question to be determined from the facts is whether, upon the termination of the contract, defendant had the right to retain this sum as damages for the non-performance by plaintiff of the contract. Defendant claims the right to retain this money under the provision of the contract quoted above, which authorizes it to retain, as liquidated damages, on the termination of the contract as provided therein, the ten per centum reserved on any work done by plaintiffs under the contract.
In the next place, the nature of the contract was such as that it was entirely proper for the parties to determine in advance what measure of compensation should be allowed in case of a breach; The damages which would result to defendant from a failure by plaintiffs to perform any of their undertakings would necessarily be uncertain and incapable of ascertainment. A failure either as to the time or manner of performing the work would necessarily delay the final completion of the road, and derange all plans for its equipment and operation; and the damage and injury which would result from such failure would be matters of mere conjecture. It was therefore competent for the parties to agree in advance upon a certain measure of damage in case of a failure. And we think this view is abundantly sustained by the authorities. Easton v. P. & O. Canal Co., 13 Ohio, 79; Pierce v. Jung, 10 Wis., 30; Faunce v. Burke, 16 Pa. St., 469; Geiger v. R. R. Co., 41 Md., 4; Dwinel v. Brown, 54 Me., 468; Hennessey v. Farrell, 4 Cush., 267.
It is claimed by plaintiffs that it was specially agreed between'them and defendant’s president, when it was arranged that they should abandon the work, that the work then done should be measured and computed, and that they should be paid the full sum to which it should amount under the contract. This arrangement was made, as we have seen, on the second of September. There were three parties present at the time, viz: John S. Wolf, a member of plaintiff’s firm, Whitehead, the president of the railroad company, and the chief engineer who was in charge of the work. Whatever arrangement or agreement was made was between Whitehead and Wolf. The engineer does not appear to have taken any part in the negotiation. Wolf and Whitehead have testified as to what took place at the interview, but the engineer, although a witness in the case, was not examined by either party on that question. There is substantial agreement between the two witnesses that it was then agreed that plaintiff should quit the work and abandon the contract as soon as Whitehead could organize a force to carry on the work or procure other contractors to complete it.
They also agree that the work then completed by plaintiff should be measured with the view of determining the amount which they were entitled to receive therefor. But when they come to the question whether it was agreed that the reserved ten per cent should be paid over to plaintiffs, there is irreconcilable conflict between their statements. Wolf testifies positively and circumstantially that Whitehead’s proposition was that the work should be measured, and the whole sum to which it amounted, including the reserved ten per cent, should be paid, and that he accepted that offer; while Whitehead swears, with equal positiveness, that not one word was said in the conversation about the reserved sum, or about waiving any claim which the company might have for damages on account of the failure of plaintiffs to complete the work in
But there was nothing like an accounting between them. Plaintiffs made no claims against defendant which were considered or even alluded to in the conversation. The only questions considered and determined were, whether they would abandon the contract, and whether the work done under it should be measured with the view of determining the amount whieh should be paid them therefor; so that plaintiffs’ claim is not at all strengthened by the character of the transaction. And when we come to the evidence with reference to the transactions subsequent to the agreement, it is equally unsatisfactory and inconclusive.
Plaintiffs introduced evidence of certain acts and declarations of Whitehead’s subsequent -to the transaction, which
We have examined the evidence with care, and we are not able to say that thez’e is a preponderance in favor of the claim that defendant, by contract, waived the right' to retain said money. It is insisted, however, by plaintiffs that, as the contract was terminated by the agreement of the parties, the right of defendant to retain the money as damages for the non-performance by plaintiff of its conditions was waived. But we think this position is not sound. The right of defendant to retain the money is dependent, under the tei*ms of the contract, on two facts. These are, first, the failure of plaintiffs to perform their undertaking; and, second, the termination of the contract because of this failure.
We have already seen that plaintiffs were guilty of a breach of the contract, which entitled defendant to terminate it. It desired to terminate it for this reason alone, and it was so terminated; and it seems to us that the rights and obligations of the parties are not affected by the fact that the termination was effected by the consent of the parties, rather than by the notice provided for in the contract.
The claim of defendant for special damages because of plaintiffs’ failure to perform is necessai'ily disposed of by the holding that the sum reserved under the contract is in the nature of liquidated damages. We reach the conclusion that the judgment of the circuit court should be
Affirmed.