Star Sand Co. v. Portland

JOHNS, J. 1. Where the damages are certain, or can be made so, as a rule a stipulation as to the amount thereof will be held to provide for a penalty, and therefore will not be enforceable ás a stipulation, but— “On the other hand, if the subject matter of the contract is of uncertain value, or if the damages arising from a breach are uncertain or difficult to ascertain with any degree of accuracy, the uncertainty and difficulty constitute an element very persuasive in the direction of holding that the amount stipulated tó be paid, in the event of breach, being iu itself not unreasonable or oppressive, is liquidated damages”: Webster v. Bosanquet, Ann. Cas. 1912C, note 1026. The rule “applies with especial force to contracts with municipalities for the erection, construction, or operation of public works, for the breach of which [329] there can be no adequate measure of damages”: Id., p. 1028. In Salem v. Anson, 40 Or. 339 (67 Pac. 190, 91 Am. St. Rep. 485, 56 L. R. A. 169), the principle is thus stated: “Where a city has required from the grantee of a public franchise a bond conditioned that the terms of the grant shall be complied with, and the bond has been tendered and accepted, the sum specified in such bond is substantially a statutory penalty, and, upon a breach of the bond, the entire sum may be recovered, without proof of special injury.” Learned v. Holbrook, 87 Or. 576 (170 Pac. 530, 171 Pac. 222), holds that— “Where the parties by contract stated a reasonable sum as liquidated damages, neither could urge that the damages were greater or less than the amount agreed upon.” In this class of cases, where the complaint is founded upon specific performance of an admitted contract which provides for stipulated damages on account of delay, and the amount, thereof is reasonable, the parties are bound by the stipulation, and no further proof of damages is required. In the instant case the amount agreed upon is reasonable. 2. As we construe the pleadings, the complaint is founded upon written contracts which are definite and certain in their terms as to the time and manner of performance. The plaintiff alleges specific performance. The defendant admits the execution of the contracts but denies that the plaintiff kept or performed their terms and conditions, charging in particular that it failed to complete the work within the time called for by the contracts; that by reason thereof the defendant suffered, as to the first cause of action, “damages to the extent of $10 per day for [330] each and every day that the completion of said work” was delayed beyond July 28, 1908, after the expiration of the extensions which the city admits were granted; and that after deducting the amount of such damages the plaintiff has been paid in full. In legal effect the reply admits that the plaintiff did not complete the work within the time set, but alleges that the delay was caused by the neglect of the city, and that the plaintiff was not responsible. Not one of the contracts was completed within the required time. Different extensions were granted, and for the delay thereafter deductions were made by the defendant for the stipulated damages provided in the respective contracts. The proof shows that the plaintiff does not seek to recover upon the original agreements, but that its claim is based upon the contracts as extended and modified between it and the city. The defendant insists that by reason thereof the reply is a departure from the complaint and that plaintiff cannot recover on the strength of its reply. Under the decisions of this court that contention must' be sustained. The complaint does not assert that there was a waiver of the time within which the contracts were to be completed, or that the city was estopped by its conduct to rely upon the terms of the instruments. In Long Creek Building Assn. v. State Insurance Co., 29 Or. 569 (46 Pac. 366), the opinion holds the rule to be well settled that: “A plaintiff cannot plead performance of a condition precedent, and recover under proof of a waiver of such performance.” In Hannan v. Greenfield, 36 Or. 97 (58 Pac. 888), it is said: [331] “It is a settled rule that proofs must follow the allegations of the complaint; thus an allegation that plaintiff had performed all of the conditions of a contract precedent to his right to sue will not support testimony that such conditions had not been performed because of a waiver by the other party.” Durkee v. Carr, 38 Or. 189 (63 Pac. 117), is authority for the following: “The rules of the common law respecting the allegation of the performance of a condition precedent have been changed by our statute so as to permit a party to plead generally that he had duly performed all the conditions imposed upon him by his agreement: Hill’s Ann. Laws [1892], §87. But when he relies upon a waiver of such performance by the adverse party, he should aver that fact, so as to let in evidence thereof. In Carnahan Manufacturing Co. v. Beebe-Bowles Co., 80 Or. 124, 129, 131 (156 Pac. 584, 586), the opinion of Mr. Justice Burnett in construing a complaint similar to that in the case at bar, says: “That pleading up to that stage of the trial was to the effect that the plaintiff had fully and completely performed all of the terms of its engagement. It then proposed to make a radical change of front and say in substance: ‘It is true that I did not meet all of the requirements of my stipulation, but it was not my fault.’ * * - “The principle being established that the approval of the umpire is a condition precedent, it is necessary as a matter of pleading that the party show a compliance with the contract or a valid reason for a shortcoming in that particular. This he must do in his complaint, for it is his duty to state the whole truth respecting his grievance in the first pleading.” The opinion by Mr. Justice McCamant in Mercer v. Germania Ins. Co., 88 Or. 410 (171 Pac. 412), holds that: [332] “In an action on a contract plaintiff must prove a right to prevail under the contract unless he alleges in his complaint a waiver on the part of the defendant of some of the provisions of the contract or an estoppel to assert them as a defense.” Here, since the proof shows and plaintiff admits that neither of the contracts was completed within the time specified, and there is no allegation in the complaint of facts which would constitute a waiver or estoppel on the part of the city, it must follow that under the authorities cited the plaintiff was not entitled to recover upon a complaint based on specific performance. The judgment is affirmed. Affirmed. Rehearing Denied. McBride, C. J., and Harris, J., concur. Bennett, J., concurs in the result.