George M. Newhall Engineering Co. v. Daly

Dodge, J. In the presentation of this case, counsel have discussed the rules of law governing the rights of parties upon the partial completion of an entire contract in each of three different phases: First, when the breach is committed by the plaintiff wilfully, without fault of the defendant, and without any excuse; secondly, when the failure to complete the 'contract is due to the wrongful act of the defendant, preventing the plaintiff, without default on his part, from completion ; and, thirdly, an intermediate phase, where neither party is strictly at fault, but through oversight, or by force of cir■cumstances beyond the control of either, the work is not fully ■completed, but a portion of it performed at expense to the plaintiff, resulting in substantial benefit to the defendant. Of course, when it is ascertained which of these phases is presented in the individual case, discussion of the rules of law •governing the others is unnecessary. It becomes necessary, therefore, to first consider the facts of this case, to which must be applied the law in deciding upon the rights of the parties. A referee, with whom has concurred the trial court, has rattempted, in an exhaustive finding, to settle those facts to [260] substantially the following effect: The plaintiff, from early in July up to the 8th of November, diligently, and in substantial accord with its contract, performed the work to an extent exceeding one-half its total. Thereupon it suspended work by reason of insistence to it by the defendant that official permits were necessary to its further prosecution, and by the owner of the ground, to whom obviously the plaintiff was authorized by the defendant to defer, that the work must stop until those permits were obtained; defendant having agreed, for a consideration paid by the plaintiff, to obtain such permits. Plaintiff did not, either in fact or in law, thereby abandon the work, but its cessation was not only proper, but was substantially rendered necessary by the act of the defendant. While the work was so suspended, the defendant, without right, took possession of the work, and thereafter excluded the plaintiff therefrom. This summary is not entirely in the language of the findings, and perhaps includes one or two-elements not expressly declared, but, in light of the controversies between witnesses and of the evidence generally, they are capable of no other construction. After a careful examination of all the testimony, we are unable to say that these findings are so without support from credible evidence, or so-antagonized by any clear or overwhelming preponderance, as to convince us that the court, through mistake, prejudice, or other cause, did not give such evidence proper consideration. Hill v. Am. Surety Co. 112 Wis. 627, 631, 88 N. W. 642. It must be conceded that several of the facts thus found are controverted by positive and direct testimony of witnesses, which, if believed, might constitute a preponderance to the contrary, possibly clear and overwhelming; but the extent to-which such witnesses were impeached, either by fully established facts, their own inconsistencies, or, where present upon the trial, by their appearance and manner, was a subject especially within the capacity of the referee to decide. Throughout the case witnesses placed themselves in such com261 píete contradiction to eacb other that the inference of wilful falsification by one or the other was at least justifiable, and the referee could hardly have reached a conclusion either way without first deciding in his own mind against the credibility of certain witnesses. If, as seems probable, his conclusion was against the honesty and integrity of the defendant and certain of his witnesses, that fact became a cogent one in reaching the further conclusion as to the bad faith of the defendant in the performance of certain conceded acts; as, for example, giving a written demand to the plaintiffs agent, shortly before the defendant took possession of the work, requesting plaintiff to continue and complete it. This was accompanied by what was substantially a notification that defendant would repudiate the work already done, unless modified and changed to an extent which he testified would cost nearly as much as the work itself. Obviously, if such defects existed, there would be no inducement to the plaintiff to attempt to go on with its work, and the court has concluded that this demand to continue was not in good faith, but was fraudulently accompanied and burdened by a false declaration, calculated and intended to deter the plaintiff from acceding, thereto. Other illustrations might be given and evidence pointed out to show the incorrectness of appellant’s assertion that certain of the material findings are without support, or that certain conflicting facts resting on discredited evidence are undisputed; but, as often stated, no extended discussion of the evidence is warranted, where, after its examination, this court concludes that the material findings are supported. Laycock v. Parker, 103 Wis. 161, 172, 79 N. W. 327. These findings, construed in the light of the evidentiary issues and the opinion of the referee, bring the situation clearly within the second of the above-enumerated phases, where the plaintiff, without substantial default on its part, is wrongfullyprevented by the defendant from completing the contract. The failure to perform, the work up to that time in substantial accord with [262] the contract is negatived, except so far as variations were assented to and waived by defendant, or so far as those alleged consisted merely in incompleteness; and there is evidence to that effect. Failure of expedition is negatived by the finding that no time of performance was fixed by the contract, and that plaintiff proceeded with diligence. Suspension of the work on November 8th is found to have been justified by absence of permits and by prohibition against proceeding without them, and not to have been an abandonment. These are the only suggested delinquencies on plaintiff’s part up to the time defendant took possession of the premises and work to the exclusion of plaintiff. Defendant urges that there is no finding that the permits were necessary in law to enable plaintiff to proceed with its work, but there is finding and abundant evidence that they were necessary in fact, since the owner of the property prohibited continuance without them. We think the evidence sko-ws that the defendant did also, if that fact were necessary to support the judgment. Thus the plaintiff, being no wise in default, and not having abandoned the work, on November 21st the defendant took possession, and thereafter excluded plaintiff, thus rendering impossible his completion of the contract. To the situation thus summarized the' rules of law applicable are not doubtful; indeed, are not seriously controverted by appellant’s counsel. If appellant wrongfully prevented plaintiff, not in default) from completing its contract, after it had gone to substantial expense in its partial performance, he placed plaintiff in a predicament, and conferred upon it, as a result, the right of choice between two methods of escape. Plaintiff might have insisted upon the continued existence of the contract, and upon being permitted to perform it, and have recovered its damages for breach thereof; or, recognizing the impossibility of carrying out the contract by reason of defendant’s wrongful act, it was at liberty to treat such act as a declaration on defendant’s part of rescission, and to meet the [263] same with an assent thereto on its .part, in wbicb case, certainly where the contract itself provided for no apportionment of compensation, it might recover quantum meruit the reasonable value of the work done by it prior to such rescission. Such rule is but the imposition of the ordinary condition that he who rescinds a contract — which the defendant does by rendering its performance impossible — must reestablish the other party in his status quo. U. S. v. Behan, 110 U. S. 338; Adams v. Burbank, 103 Cal. 646, 31 Pac. 640; Hemminger v. Western Assurance Co. 95 Mich. 355, 54 N. W. 949; Davis v. Hubbard, 41 Wis. 408. Respondent has adopted the latter course, and the trial court, correctly following the rule of law last stated, has found the reasonable value of the work done by plaintiff, and awarded judgment therefor, in which there is no error. By the Court. — Judgment affirmed.