National Contracting Co. v. Sewerage & Water Board of New Orleans

PARDEE, Circuit Judge, (after stating the facts). The basis of this action is a contract to construct certain foundations, covered canals, and sewers, of -brick, mortar, concrete, steel, and stone; the contractor to furnish the materials and perform the work, and to be paid therefor certain prices (not given in the pleadings) per cubic yard of brickwork or concrete, varying with the cement used, and all in accordance with certain specifications. According to the specifications, certain portions of the brickwork and of the concrete were to be laid in imported Portland cement. Though the fact is not averred, the inference po be drawn from the petition is that the contract has been fully executed and the contractor settled with and paid. The substance of the plaintiff’s claim is that in executing the contract in lieu of using imported Portland cement, as required in the specifications, the contractor, with the authorization of the plaintiff’s engineer, used a slag or Pozzolan cement for which it had paid less money than it would have had to pay for the imported Portland cement if the latter had .been used. The pleadings fail entirely to aver any damages sustained by the plaintiff beyond the suggestion that the substitution complained of impairs the drainage'system :of the city of New Orleans. In the lower court it was ruled, and the ruling is concurred in and asserted here by- counsel for the defendant in error, that the petition ■ [329] and supplemental petition do not state sufficient facts to constitute an action for damages under the contract, but do state facts sufficient to constitute an action ex quasi contractu, or in repetition, under the following articles of the Civil Code of Louisiana, to wit: “Art. 2293. Quasi contracts are the lawful and purely voluntary act of a man from which there results any obligation whatever to a third person, and sometimes a reciprocal obligation between the parties. “Art. 2294. All acts from which there results an obligation without any agreement in the manner expressed in the preceding article from quasi contracts. But there are two principal kinds which give rise to them, to wit: The transaction of another’s business, and the payment of a thing not due.” “Art. 2301. He who receives what is not due to him, whether he receives It through error, or knowingly, obliges himself to restore it to him from whom he has unduly received it. “Art. 2302. He who has paid through mistake believing himself a debtor, may reclaim what he has paid. “Art. 2303. To require this right it is necessary that the thing paid be not due in any manner, either civilly or naturally. A natural obligation to pay will be sufficient to prevent recovery. “Art. 2304. A thing not due is that which is paid in the supposition of an obligation which did not exist, or from which a person has been released. • “Art. 2305. That which has been paid in virtue of a void title is also considered as not due. “Art. 2306. The payment from which we might have been relieved by an exception that would extinguish the debt, affords grounds for claiming restitution. “Art. 2307. But this'exception must be such that it shall extinguish even all natural obligations. Thus, he who having the power to plead prescription shall have made payment cannot claim restitution.” The same principle is stated in the Code of Practice (article 18), which says: “He who pays through error what he does not owe, has an action for the repetition of what he has paid, unless there was a natural obligation to make such payment; but he must prove that he paid through error, otherwise it shall be presumed that he intended to give.” The principles thus declared are all found in the common law and are based on the maxim that no one shall enrich himself at the expense of another. See Addison on Contracts, vol. 2, pp. 1039, 1040. The whole case as presented by the petition and supplemental petition arises out of a violation of contract without which violation there would be no vestige of a right of action. And this, taken in connection with the facts that the defendant in error bought and paid for no cement as such, had no contract that any specific quantity of imported Portland cement should be used in the works contracted for, or that the cement should be furnished or paid for at any certain price, shows that the defendant in error cannot maintain on the facts stated an action in repetition to recover the difference between what the contractor would have had to pay for the cement contracted to be used and what he paid for the cement actually used, nor for the profits the contractor may have made by the alleged substitution. What the defendant in-error paid to the contractor was paid under the contract, and for so many cubic yards of brickwork, and so many cubic yards of concrete; and, if too much was paid because the work was not in accordance with the contract-, it can only be recovered, in an action for damages on. [330] allegations of fact suitable to such action, for the Louisiana Civil Code expressly provides for the action. The contract, classified under the Louisiana Civil Code, was one of “letting and hiring” in which the National Contracting Company was the undertaker. In regard to such contracts, article 2756, Rev. Civ. Code La., provides: “To build by a plat or to work by the job is to undertake a building or a work for a certain stipulated price.” And the next article provides: “A person who undertakes to make a work, may agree either to furnish his work and industry alone or to furnish also the materials necessary for such a work.” And article 2769 provides: “If an undertaker fails to do the work he has contracted to do, or if he does not execute it in the manner and time he has agreed to do it, he shall be liable in damages for the losses that may ensue from his noucompliance with his contract” ■ Article 1930, Rev. Civ. Code La., dealing with the question of damages resulting from the inexecution of obligations, provides: “The obligations of contracts extending to whatever is incident ’ to such contracts, the party who violates them is liable, as one of the incidents of his obligations to the payment of the damages which the other party has sustained by his default.” These articles are practically written in and form part of the contract between the parties, and to do justice between them, if the contract has been violated, it is neither proper nor necessary to ignore the plain provisions of the Code applicable to the case, and resort to an action in repetition based on an implied contract to refund money said to have been paid in error, because the brand of cement specified in the contract was not used as an ingredient in the brickwork and concrete actually paid for. The question of pleading is not a mere matter of form; substantial rights are involved. If the action for repetition can be maintained, it may be, as claimed by counsel and ruled on the trial, that the only question for the court and jury was the difference in prices between the cement specified in the contract and the cement substituted, or the amount of profits the contractor made by the substitution; in which case the action could only be defeated by showing that the contractor paid as much for the substituted cement as for the cement specified in the contract. Such a rule of damages could only be justified on the assumption contrary to the fact that there was a contract express or implied that a cement of specified price was to be furnished regardless of quality. The contract between the parties provided as to the strength and quality of the cement to be used in the brickwork and concrete, but there was no provision as to the price of cement, and it seems to us immaterial what the contractor paid for the cement actually used, or would have had to pay for the cement specified in the contract. If the action is one for damages under articles 1930 and 2760 of the Code, supra, the defendant can show how and why and by what authority and to what effect the substitution of cement was made, and the rule of dam [331] ages will be what the plaintiff has actually lost or been damaged, and not what profits or losses the contractor may have made. AVe have given careful attention to the cases and authorities cited and illustrated in the opinion of the learned trial judge, and in the brief of the counsel for the defendant in error, but we find nothing in any of them really conflicting with the views herein expressed. A review is not necessary, and we notice only those adjudged cases, apparently all well decided, from which counsel have quoted general remarks and dicta indulged in by the judges announcing the opinions of the respective courts, which remarks and dicta are cited to show that, whenever a person has paid more than he owed, he may always recover it back by an action ex quasi contractu. United States v. Barlow, 132 U. S. 271, 10 Sup. Ct. 77, 33 L. Ed. 346, was an action brought by the government, under sections 3960, 3961, and 4057 of the Revised Statutes [U. S. Comp. St. 1901, pp. 2702, 2756], to recover from the defendants’ subcontractors, for carrying the mail, moneys paid them under a mistake of fact caused by their false representations as to the services. Appleton Bank v. McGilvray, 4 Gray, 522, 64 Am. Dec. 92, was an action for money had and received to recover money paid by mistake. Marsh, Respondent, v. Richards. Appellant, 29 Mo. 99, was an action on a special contract to recover compensation alleged to be due on its performance. The defense was that the contract had not been executed in the manner and with the materials required by the contract. Johnson County v. Lowe et al., 72 Mo. 637, was an action upon a bond to recover damages, because a certain bridge was not built according to contract, and therein it was held that the fact that the bridge had been accepted was not “a waiver by the county of any defects in the bridge of which its agents were ignorant at the time of such acceptance and payment.” Barnes et al. v. District of Columbia, 22 Ct. Cl. 366, from which counsel quoted liberally, seems to have been a suit brought to recover a balance alleged to be due upon contracts for public works in the District of Columbia, in which the defense was made that the works had not been constructed according to contract. We quote as follows: “The question here involved, however, is not necessarily whether or not the defendant, in an independent suit against the claimant, could recover hack the amount of overpayments credited or paid. The claimant has of his own motion brought these contracts and extensions before the court and has invited the issues which' the defendant tenders. If he seeks a settlement of parts of his several contracts, he cannot complain if the defendant asks to have the whole accounts under the same revised and restated. The subject in that view has heretofore been considered by this court and the Supreme Court, and the law so declared. McElrath’s Case, 102 U. S. 441, 26 L. Ed. 186, affirming the judgment of this court, 12 Ct. Cl. 312; Brown’s Case, 17 Ct Cl. 421; McKee’s Case, 12 Ct. Cl. 560.” Calkins v. Griswold, 11 Hun (N. Y.) 208, was an action to recover overpayment for a lot of grapes, in which there was a mutual mistake of fact as to the weight of the grapes delivered, and it was held that the plaintiff was entitled to recover back the money paid in consequence thereof. Wheaton v. Lund, 61 Minn. 94, 63 N. W. 251, was an action to recover balance due on a contract, in which the defense was that the contract had not been complied with. Duval, Receiver, v. [332] United States, 25 Ct. Cl. 46, was an action against the government for carrying the mail, in which overpayments under a mistake of fact were set up as counterclaims and allowed by the court. Blaudot v. Lemaire Liege, 27 Avril, 1876, Pasicrisie Beige 1876, seems to have been a plain case for the recovery of amount of overpayment for work and material. In our opinion, no one of these cases, nor any case cited, is authority for the present action. ■ The first assignment of error is as follows: “That the court erred in overruling the defendant’s plea of no cause of action in this cause.” As we are satisfied that the plaintiff below does not' allege facts sufficient to entitle him to recover ex contractu or ex quasi contractu, we think this assignment of error, is well taken, and necessitates the reversal of the case. The other assignments of error need not be considered. The judgment of the Circuit' Court is reversed, and this cause is remanded with instructions to sustain the exceptions of ño cause of action, and otherwise proceed according to good practice and the views herein expressed.