Myers v. South Feather River Water Co.

Baldwin, J. delivered the opinion of the Court—Cope, J. concurring. This case, involving the construction of a certain contract, was here before. The contract is fully set out, and will be found in 10 Cal. 580. After the return of the cause, it was tried again, and is brought up, by the plaintiff on appeal, from the judgment of the District Judge, who tried the case without a jury. The contract was to dig a ditch by plaintiff for defendant, and the question arises as to the construction of the following sections of the contract : “ For and in consideration of which, the parties of the second part agree to pay to the party of the first part, the sum of three dollars per rod for each and every rod of the above mentioned excavation, made according to the terms of this contract, at the time, place, and manner, hereinafter mentioned, viz.: they shall pay at the office of the company, at Forbestown, thirty-three and a third per cent, on the completion of each mile, in cash of its value, estimated at three dollars per rod; the remaining sixty-six and two-thirds per cent, or two dollars per rod, shall be paid in water, at thó rate of twenty-five cents per inch, delivered through an orifice under six inches of pressure anywhere along, and at, the.main ditch. Sec. 8. It is further agreed, between the parties contracting, that the parties of the second part shall reserve the right to pay the value of the excavation or three dollars per rod in cash, and also the right to appoint such agent or agents, to manage the sale of water and other matters of the company as they, the parties of the second part, may deem best for the interest they represent. See. 9. The parties of the second part agree to pay to the party of the first part the actual first cost of all the flumes the party of the first part may construct upon the line of the main ditch, [275] in the proportions of cash and water as before specified, for the excavation, viz.: one-third in cash, and two-thirds in water; or, at the option of the parties of the second part, the whole amount in cash—the water to be estimated, measured, and delivered, as before specified for the excavation, under a pressure of six inches. See. 11. The parties of the second part agree to sell to the party of the first part all the water the party of the first part may desire, that may run in said ditch, at the rate of twenty-five cents per square inch, and measured as before specified, under a pressure of six inches, until the party of the first part is fully paid, according to the terms of this contract for the work herein contracted for; and the party of the first part hereby agrees and binds himself to sell no water to any person or persons for a less amount than fifty cents per square inch, measured as before specified under a pressure of six inches. Sec. 12. The parties of the second part agree to pay to the party of the first part the proceeds of all water sold by the agents or agent of the company out of said ditch, until the party of the first part shall be fully paid for the construction of said ditch according to the terms of this contract; all branch ditches dug shall be the property of the South Feather Water Go. upon the full payment of the terms specified herein, without further cost to the company. Sec. 15. The party of the first part agrees to pay twenty-five cents per square inch for all or any first sales of water anywhere along the line of said ditch, or between its terminus and Feather River, until the terms of this contract are fulfilled.” We construe this agreement, taken together, to mean this: That the company should pay three dollars per rod—one-third of it in money—on the completion of each mile, at the office of the company; the other two-thirds to be paid in water, at the rate of twenty-five cents per square inch, delivered through an orifice under six inches of pressure, anywhere along, and at, the main ditch. But this obligation to pay in water, as by the 7th Section, was not unqualified. The 8th Section gives the defendant the option to pay all in cash or money. But it does not follow that the two-thirds, if elected to be paid in money, were to be paid as the other third, in money, on the completion of each [276] mile. The first provision is for a payment in water; this provision is changed by the 8th Section into a provision for a payment in cash, at the election of the company. The payment in water would have been as the water was demanded anywhere along the ditch, and would not, of course, be due until the whole ditch was completed; and when this term was changed by an alteration in the medium of payment, it is not to be considered as altering any other of the terms of the contract except the medium. It nowhere appears that the contract was considered more beneficial to the plaintiff with this term for the payment in water, than a provision for payment in money. The remainder of the 8th Section, reserving the right of the company to appoint such agent or agents to manage the sale of water and other matters of the company, as they shall deem best, etc. seems to support this view; for if the plaintiff was to be entitled at once, on the completion of each mile, to the sum in cash, there was no use for this reservation, nor would there be if payment was to be made in specie in water. The words seem to imply that the plaintiff was interested in the sales, and in the manner of selling the water. The 12th Section, too, seems to look the same way—the parties of the second part agreeing to pay to the party of the first part the proceeds of all water sold by the agents of the company out of the ditch, until he shall be' paid for the construction of it according to the terms of the contract. We think the whole contract results in this—that the company was to pay one-third in cash, on completion of each mile, etc.; that for the balance, they might pay after the completion of the ditch in money or water as they chose; if payment was made in water, the plaintiff might select the water anywhere along, and at, the main ditch; if in cash, or money, payment was to be made out of the proceeds of the sale of water. And by the 11th Section, there was given the plaintiff a right to take water, if payment was not otherwise made, at twenty-five cents per inch. But it is not, perhaps, necessary to give a definite construction to this contract—which is awkwardly and obscurely drawn— for the contract, before the completion of this work, was assigned to Humbert & Co. as security for a .debt due them by plaintiff. We passed upon the effect of this assignment in this [277] case at a former term. It transferred, as we then held, the whole benefit of the contract to the assignees. They demanded, on the 1st November, 1856,.payment of this money—or, at least so much as was coming to them from Myers. The defendant elected to pay, and did pay, in money. The payment to Lumbert & Co. was in money, on a statement as of so much due in money. Even if Lumbert & Co. had no right to receive this money, but only water, as the plaintiff contends, yet this payment would bind the plaintiff—for Lumbert & Co. were acting ostensibly for him, or by his authority. If he denied the authority, then the payment would not discharge the debt of Lumbert & Co.—in which case the assignment would remain in full force; and the plaintiff would, under our previous decision, have no right of action. Affirming the arrangement between Lumbert & Co. in part, the plaintiff must give full effect to it, and in doing this, he confirms the settlement as the liquidation and arrangement of a money demand. If we concede that the election was with the plaintiff to take his pay in money or water, the argument of the learned Judge below is conclusive; for, by the assignment, the right of election passed to Lumbert & Co. and their action settled it as a money demand. And, if the right of election were with the company, the result, of course, is the same. It seems that the company paid Lumbert & Co. one hundred and sixty-two dollars more than was due them—as the debt coming from Myers—which sum is deducted from the credit given to the company on the indebtedness on account of this contract. But we do not see how this deduction was properly made; for the assignment to Lumbert & Co. was general, and the authority given to the assignee, general, to control and receive money, etc. on.this contract between Myers and the company. The company were not bound to examine the state of account between Lumbert & Co. and Myers, and pay at its peril only such sum as was rightfully due. The payment for this whole amount was good under this general power, Lumbert & Co. being the Trustees of Myers for any excess of money received over the amount of their claim. But, according to our view of the case, independently of this fact,, we do not see any error in the judgment of the Court in [278] refusing to allow interest, as no showing was made that the receipts of the sales of the water, to the time of the settlement with Lambert & Co. or with Myers, before, (if he had any authority to liquidate the sum due,_) was sufficient to pay the debt. If there was, this sum improperly deducted—this being a matter found by the Court on uncontradicted evidence—would restrain us from interfering with the judgment below, in order to change the judgment for costs. One or two other errors are assigned, but, in the view we have taken of the question, they become unimportant. Judgment affirmed.