Schade v. Muller

Opinion by Mr. Chief Justice Moore. 1. It is contended that the copartnership of Schade Bros. & Co., cannot legally enforce against the defendant any claim or demand for labor employed or material used in the construction of his house, because Herman Schade, a member of that firm as one of die sureties on the bond, stipulated to indemnify the defendant against any claim or demand that might be made or asserted against him; and, this being so, an error was committed in rendering the judgment herein. The answer does not aver that Herman Schade became surety on the bond, on account or for the benefit of the partnership or with the knowledge or assent of the other members of the firm. A partnership is not barred from asserting a claim of lien on a building for materials furnished by the firm, merely because one of the partners, solely in his individual capacity, was a surety on the contractor’s bond and had guaranteed the delivery of the building free of liens: Burnett v. Glas, 154 Cal. 249 (97 Pac. 423). “While a contract,” says a text-writer, “made or a transaction entered into by one partner, without the scope of the firm’s busi — 230 — ness and without the consent of his copartner, does not bind his firm, yet he himself may be bound thereby”: 30 Cyc. 531. To the same effect, see, also, 22 Am. & Eng. Ency. Law (2 ed.), 144. The defendant cannot set off against the plaintiff’s demand any claim he may have against a member of the firm on the bond for indemnity: McDonald v. MacKenzie, 24 Or. 573 (14 Pac. 866). The defendant’s remedy against Herman Schade and P. F. Hall for any alleged breach of the conditions of their bond must be found in another action: Burnett v. Glas, 154 Cal. 249, 257 (97 Pac. 423). No error was committed as alleged. 2. It is maintained that the evidence relied upon for that purpose is insufficient to establish the alleged promise by the defendant to pay the plaintiffs’ claim, if they would complete the plumbing. Herman Schade, in answer to the question, ‘ ‘ What occurred in relation to the request of the defendant to complete the house ¶ ’ ’ testified as follows: “Why, on the morning of January 12th I picked up the abstract, and I noticed where the Merchants ’ Hardware Company had put a lien on Mr. Muller’s building; so I spoke to my brother Henry and Mr. Ryan about it; and they said, ‘You better go see, and see what he intends to do, or we will put on a lien.’ I said, ‘All right; I will go see him.’ So I went up, and I seen Muller, and I told him what I seen in the abstract, that the Merchants’ Hardware people had filed a lien, and he thought that was a shame to think they would put a lien on his house, whereas they could have' come right down and he would have paid the bill. I said, ‘Mr. Muller, that is just what I wanted to know, whether we would put a lien on?’ And he said: ‘No, no, no; you go right ahead and finish the work. I am going to pay all the bills, and then I am going to look to you and Hall. ’ ’ ’ — 231 — On cross-examination this witness practically repeated the testimony quoted. The bill of exceptions referring thereto reads: “The foregoing evidence of Herman C. Schade and testimony corroborative thereof is all the evidence in the case to support the promise sued on in this case.” No part of the confirmatory testimony referred to is incorporated in the transcript before us. From the defendant’s declaration to Herman Schade: “You go right ahead and finish the work. I am going to pay all the bills, and then I am going to look to you and Hall.” —a promise to pay the plaintiffs ’ claim may reasonably be implied. 3. Herman Schade, being a surety on the bond, guaranteeing a faithful execution of Alton’s contract and a delivery of the building free from liens, claims or demands, could not enforce a lien on the defendant’s real property or maintain an action against him for labor performed upon or material furnished and used in the construction of the house in excess of the contract price: Hand Mfg. Co. v. Marks, 36 Or. 523 (52 Pac. 512, 53 Pac. 1072, 59 Pac. 549). 4. The answer does not aver, nor is there any testimony in the bill of exceptions tending to show, that Herman Schade became a surety on Alton’s bond on account or for the benefit of the copartnership. In the absence of such allegation and proof, it will be presumed that he was acting in his individual capacity, and not for the firm of which he was a member, when it does not appear that the partnership was engaged in furnishing indemnity undertakings. 5. This being so, the plaintiff could have enforced a lien for the reasonable value of the labor performed — 232 — and the material used in -the “roughing in” plumbing of the defendant’s house: Burnett v. Glas, 154 Cal. 249 (97 Pac. 423). Waiving the right to file a lien was a loss to the plaintiffs and an advantage to the defendant, thereby affording a sufficient consideration for his promise to pay for the plumbing, if the work was finished by the plaintiffs: 6 Am. & Eng. Ency. Law (2 ed.), 678; 9 Cyc. 311. 6. It is argued that the complaint is predicated upon the defendant’s promise to pay an express contract price, while the court determined that the promise was to pay the reasonable value of the work and material; and, such being the case, the finding is insufficient to support the judgment, and an error was committed in this respect. The finding referred to is to the effect that, pursuant to the defendant’s promise, the plaintiffs finished the plumbing which they had undertaken in their agreement with Alton for the sum of $449.92, “which was the original contract price, and which is also the reasonable value of the work and materials furnished. ’ ’ 7. The rule is quite general that, in an action upon an express contract, the plaintiff cannot recover upon proof of an implied agreement: 9 Cyc. 749. Where, however, under a complaint counting on the reasonable value of services rendered, testimony is received tending to establish a contract for the amount demanded, such sum as disclosed by the evidence will be construed as the reasonable value in order to effectuate substantial justice: West v. Eley, 39 Or. 461 (65 Pac. 798). To the same effect, see, also, Elder v. Rourke, 27 Or. 363 (41 Pac. 6). Whether or not, in the case at bar, any testimony was received tending to establish the reasonable value of the labor employed or the material furnished in plumbing the house is not dis — 233 — closed by tbe bill of exceptions. Tbe court having found that the defendant promised to pay the plaintiffs $449.92, which was the original contract price, the further statement that such sum “is also the reasonable value of the work and materials furnished” was immaterial and does not trench upon the rule mentioned. The finding is considered adequate to uphold the decision. 8. The plaintiffs on February 9, 1914, secured a judgment against the defendant for $449.92, the original express contract price, with interest from March 1,1910, when the plumbing was completed. The testimony of Herman Schade to the effect that Muller stated to him: “You go right ahead and finish the work. I am going to pay all the bills, and look to you and Hall” —reasonably means that the defendant promised to discharge all the obligations that Alton had incurred in performing the agreement to build the house, including the contract prices which he had stipulated to pay. The finding, when read in connection with such testimony, imports a promise on the part of the defendant to pay the plaintiffs the original contract price for the labor performed and the materials furnished in executing their agreement with Alton, thereby entitling the plaintiffs to interest on their demand from the time the work was completed. 9. But, however this may be, Herman Schade, in referring to the time when the plumbing was finished, testified, in substance, that, having submitted a bill for the work, the defendant said it was all right, thereby indicating a settlement of the account and an ascertainment of the sum due thereon, upon which basis the interest was properly computed from that time. Other alleged errors are assigned, but, as they — 234 — are deemed immaterial, the judgment should he affirmed; and it is so ordered. Affirmed. Rehearing Denied. Mr. Justice Burnett, Mr. Justice McBride and Mr. Justice Benson concur.