Orem v. Keelty

Bryan, J., delivered the opinion of the Court. This was an action on the common counts in assumpsit. Keelty, the plaintiff below, entered into a written contract under seal with Orem and others, the defendants, for grading and constructing streets, avenues and sidewalks through a tract of land in the city of Baltimore belonging to them. The contract embraced a number of details, which the present purpose does not require us to consider. It was agreed that payments should be made at stated intervals upon estimates furnished by S. J. Martenet and Company, and that Orem and his associates should retain ten per cent, of the amount of these estimates, and that the sum so retained should be due and payable only on the completion of the work before the first day of September, eighteen hundred and ninety-five. The grades were to be furnished by S. J. Martenet and Company, and the work was to be done in a good workmanlike manner, under their instructions and subject to their approval. The work was prosecuted under the contract until July, eighteen hundred and ninety-five, when Martenet and Company refused to furnish the grades to Keelty which were necessary for the continuance of the work ; but they were furnished on the eleventh day of Sep [344] tember, eleven days after the time had elapsed which was appointed for its completion. It was finished in December, and on the twenty-fourth day of the month Martenet and Company gave Keelty a certificate stating that they had examined the work and found that it was in accordance with the contract as far as the material and workmanship were concerned. This suit was brought to recover the ten per cent, which had been retained by Orem and his associates, and judgment was rendered in favor of the plaintiff. The evidence did not show distinctly the circumstances which caused the refusal on the part of Martenet and Company to furnish the grades. But we will assume for the purposes of this case that it was owing to the default of Keelty. But, nevertheless, one fact stands prominently forward which has not been made the subject of contestation or denial. After the expiration of the time appointed for the completion of the work the defendants permitted Keelty to continue it, furnished him with the grades which were necessary to enable him to do so, and accepted the work and received the benefit and advantage of it. Under these circumstances there can be no doubt that the defendants are bound to pay a fair compensation for the work, labor and materials of the plaintiff. Keelty could not have sustained an action of covenant on the contract under seal; but after the failure to complete the work under the conditions of the sealed instrument a new and distinct contract arose from the acts of the parties ; from the work, labor and materials of the plaintiff furnished for the benefit of the defendants and received and appropriated by them to their own use and benefit. The opinion of this Court in Watchman v. Crook, 5 G. & J. 240, leaves this question in no doubt. It is there said : “ If after the work was done, though not pursuant to the contract, the party for whom it was done, accepted it, it would seem right and proper that he should pay for it what it was worth. This, we think, justice would require, and it is believed, that the principles of law do not forbid it. To this effect the law is stated to be in [345] Jewell v. Schroeppel, 4 Cowen’s Rep. 564. It is there said, that 'if there be a special agreement under seal to do work, and it is done, but not pursuant to the agreement, either in point of time, or in any other respect, the party who did the work may recover upon the common counts in assumpsit, for the work and labor, if the work be accepted by the party for whom it was done. The workman cannot maintain covenant, unless he perform the work strictly within the time. By permitting the plaintiffs, after knowing that the work was not completed in time, to proceed and finish it, he waived all right' to object on that ground, and the law implies a promise on his part to pay what the labor was reasonably worth.’ ” In the opinion a case is quoted from 4 Tauntods Reports, 745, where a contract was made between lessor and lessee that the latter should do certain work within two months. After the expiration of the time the lessor encouraged the lessee to proceed with the work, and it was held that the lessee might recover as for work and labor on an implied promise arising out of so many of the facts as were applicable to the new agreement. In Lucas v. Goodwin, 3 Bingham’s New Cases, 737, there was a contract for the building of certain cottages, and it was agreed that payment should be made, on condition that the work should be completed on the tenth of October; but they were not finished until the fifteenth. Lord Chief Justice Tindal said : “If it be said that the completion by the 10th of October is the condition precedent, at least the objection should have been taken at the time; in accepting the work done the defendant admits that it is some benefit to him, and that the plaintiff is entitled to some remuneration. It is not a condition, but a stipulation, for non-observance of which the defendant may be entitled to recover damages; but even if it be a condition, it does not go to the essence of the contract, and is no answer to the plaintiff’s claim for the work actually done. It never could have been the understanding of the parties, that if the house was not done by the precise [346] day, the plaintiff would have no remuneration.” A passage from an opinion of the Supreme Court of the United States sets this question in a very clear light. These are the words of the learned Court: “ If A contract to deliver a horse to B on Monday next, for which B agrees to pay $100, A cannot recover by an offer to deliver on Tuesday; but if A agree to deliver a horse, buggy and harness on Monday, and B accepts delivery of the horse and buggy, can he refuse to pay anything, though he accepts delivery of the harness on Tuesday? This is absurd. He waives by this acceptance the point of time as to the harness, at least so far as A’s right to recover the agreed sum is concerned. If B have suffered any damage by the delay he can recover it by an action on A’s covenant to deliver on Monday; or, if he wait to be sued,'he may recoup by setting it up in that action as a cross-demand growing out of the same contract.” The case was different in some respects from the present one, but the quotation which we have made is a good illustration of the principle involved. Phillips v. Seymour, 91 United States, 651. The plaintiff could not have recovered in an action of covenant on the sealed instrument, because he would have been obliged to allege and prove the completion of the work before the first day of September, eighteen hundred and ninety-five. But parties to a contract have a right to change it as they mutually agree to do. And here by their dealing with each other they have made a new contract superseding the sealed instrument; that is to say, the law determines that in justice and right a new contract shall be implied. This new contract provides that the plaintiff shall recover the value of his work, and that the defendant shall be allowed such damages as have been caused by delay. The value of the work, if properly performed, is measured by the contract price. There is, however, no sufficient evidence in the record to show any amount of damage sustained by the defendants in consequence of the failure to complete the work at the stipulated time. There [347] was considerable discussion of the question of stipulated damages ; but as the clause in the sealed instrument on which the discussion was founded has been virtually eliminated from the contract by which the rights of the parties are determined, the question can have no influence on our decision. (Decided March 31st, 1897). Inasmuch as we have based our opinion on the assumption that the delay in completing the work was owing to Keelty’s default, and on the ground that there is no evidence of any amount of damage to the defendants by the ■delay, the rejection of the evidence in the first exception is of no consequence. We think that the plaintiff’s prayer was properly granted. The defendant’s prayers are drawn on the theory that the sealed instrument is the cause of action ; but they are not applicable to the implied contract which became substituted in its place. Judgment affirmed.