King, Fuller, & Co. v. Lamoille Valley Railroad

The opinion of the court was delivered by Powers, J. The plaintiffs were contractors for building certain sections of the defendant’s railroad. The terms of their agreement were embodied in a written contract under seal, signed by both parties. By the terms of the contract the plaintiffs agreed to complete the work on or before September 1,1871. By note 4 incorporated in the contract it is provided that the plaintiffs, on three months’ notice in writing by the defendant, shall retard or lessen the work to such extent as the defendant may desire, and, if the work be so retarded, then the time for the completion of the work is to be extended such length of time as the engineer in charge may determine. The plaintiffs began the prosecution of the work under the contract in 1869, and continued their work with a small force, not large enough to complete the work by September 1, 1871, but intending to increase the force sufficiently for that purpose, until May 28, 1870, when they were notified by the defendant “ to stop any increase of work.” After this, mutual arrangements were made between the plaintiffs and defendant, as shown by the correspondence referred to in the report of the referees, from which the referees find the fact that it was mutually understood and agreed by the parties before September 1, 1871, that the time for the completion of the contract should be extended, and that the work was thereafterwards prosecuted pursuant to such agreement. The work was done, estimated, and paid for, pursuant to the terms of the contract in all respects save the time of performance. The defendant now insists that the arrangement of the parties under which the extension of the time for the completion of the work was made, was such as compels the plain [376] tiffs to sue in assumpsit, and that this action of covenant cannot be maintained upon the contract so modified. The general rule that the modification of a contract under seal by a new and subsequent parol agreement changing some of the contract provisions will set the whole contract at large and compel a resort to the action of assumpsit upon the modified contract, is well settled, and not questioned by counsel in this case. The plaintiff must set out his contract in his declaration, and must prove performance of it as it is laid. Proof of performance after the time would not support the declaration, and therefore would be inadmissible. Little v. Holland, 3 T. R. 590; Jewell v. Schrœppel, 4 Cowen, 564; Smith v. Smith, 45 Vt. 433. But to work this result, the sealed contract must appear to have been in whole or partly superseded by the new parol agreement, so that performance by the party after the parol modification is not an execution of the original contract, but an execution of the modified contract. In this case the date named, September 1, 1871, is an alternative date. The contract itself provides another time for performance. Taken as a whole, the contract practically runs, the said work to be finished, &c , on or before September 1,1871, or such later day as may be fixed upon by the engineer upon the happening of the contingency herein provided for. If the contingency happen, and the time be thereupon extended, the after performance of woi’k is not done in execution of any new contract, but in execution of the original contract itself, and for any breach of its terms an action of covenant will lie. Shaeffer v Geisenbergh, 47 Penn. St. 500. In the case last cited the plaintiff contracted under seal to construct a building for the defendant. The contract contained this clause : “ The said Geisenbergh, however, reserves the right to have changes made in the plan or arrangement of the building, he compensating the said Shaeffer for any additional expense incurred thereby, if any.” Changes were made by the defendant, and extra expense thereby occasioned to the plaintiff. The plaintiff sued in assumpsit, and it was held that the modifications made were provided for by the sealed contracts, and, when made, were in execution of that contract, and the remedy was covenant upon that contract. The provision that the defendant should give three [377] months’ notice of their determination to suspend work, was made for the plaintiffs’ benefit and might be waived by them. The letters of the engineer to the plaintiffs, dated November 20, 1872, and November 27, 1872, clearly show that the defendant recognized the contract as still in force, and excused the plaintiffs from further prosecution of the work. It was the defendant’s fault that no definite extended time was fixed for. the completion of the work. The. plaintiffs were powerless to fix the time, and hence no advantage can be. taken by the defendant of their own neglect. It is argued that the directions of the engineer tó the plaintiffs not to increase their working force, is not an order retarding or lessening the work within the purview of note 4 in the contract. The defendant knew, as well as the plaintiffs, that the force then being worked could not complete the work within the time limited, and knew of the contemplated increase of force. The language of the order of May 28, 1870, is to stop any increase of work. It is not to stop all work, but stop any increase of work. What meaning would an intelligent man expect would be given to such language ? Or how could an intelligent man have used such language, or write any letter of the character upon the subject of the plaintiffs’ working force, if he was not cognizant of the fact of a contemplated increase of work ? The letter meant, and was evidently intended to convey, an order to retard the work. The evidence on this subject was properly admitted by the referees. The plaintiffs are entitled to recover the item for retained fifteen per cent., and the item for work done by Bycraft & Crombie within three months after notice to plaintiffs to suspend work, in November, 1872, both amounting to $13,005, and interest from date of report. The pro-forma judgment of the County Court is reversed, and judgment for the plaintiffs.