Source: https://supreme.justia.com/cases/federal/us/69/1/
Timestamp: 2019-04-22 16:03:05+00:00

Document:
1. Performance of a contract to build a house for another on the soil of such person, and that the work shall be executed, finished, and ready for use and occupation and be delivered over so finished and ready to the owner of the soil at a day named, is not excused by the fact that there was a latent defect in the soil in consequence of which the walls sank and cracked, and the house, having become uninhabitable and dangerous, had to be partially taken down and rebuilt on artificial foundations.
2. While a special contract remains executory, the plaintiff must sue upon it. When it has been fully executed according to its terms, and nothing remains to be done but the payment of the price, he may sue either on it or in indebitatus assumpsit, relying, in this last case, upon the common counts; and in either case the contract will determine the rights of the parties.
3. When he has been guilty of fraud or has willfully abandoned the work, leaving it unfinished, he cannot recover in any form of action. Where he has in good faith fulfilled, but not in the manner nor within the time prescribed by the contract, and the other party has sanctioned or accepted the work, he may recover upon the common counts in indebitatus assumpsit.
4. He must produce the contract upon the trial, and it will be applied as far as it can be traced; but if, by fault of the defendant, the cost of the work or material has been increased, insofar the jury will be warranted in departing from the contract prices. In such case, the defendant is entitled to recoup for the damages he may have sustained by the plaintiff's deviations from the contract, not induced by himself, both as to the manner and time of the performance.
"in all its parts and details, and for the complete finish and fitting for use and occupation of all the houses and buildings, and the several apartments of the house and buildings, to be erected pursuant to the plan of the work described and specified in the said schedule, and that the work, and the several parts and parcels thereof, shall be executed, finished, and ready for use and occupation, and be delivered over, so finished and ready,"
at a day fixed. Jones built the house according to the specifications, except insofar as Miss Dermott had compelled him -- according to his account of things -- to deviate from them. Owing, however, to a latent defect in the soil, the foundation sank, the building became badly cracked, uninhabitable, and so dangerous to passersby that Miss Dermott was compelled to take it down, to renew the foundation with artificial "floats," and to rebuild that part of the structure which had given way. This she did at a large expense. As finished on the artificial foundations, the building was perfect.
here, the plaintiff had abandoned his work, leaving it unfinished? how far "acceptance" -- when such acceptance consisted only in a party's treating as her own a house built on her ground -- waives nonfulfillment, there being no bad faith in the matter? and some questions of a kindred kind. The most important question in the case, however, was the refusal of the court to charge, as requested, in regard to the "recoupment," and the correctness of that refusal rested upon the effect of Jones' covenant to deliver, fit for use and occupation, in connection with the latent defect of soil upon which the foundation was built.
The defendant in error insists that all the work he was required to do is set forth in the specifications, and that, having fulfilled his contract in a workmanlike manner, he is not responsible for defects arising from a cause of which he was ignorant, and which he had no agency in producing.
The principle which controlled the decision of the cases referred to rests upon a solid foundation of reason and justice. It regards the sanctity of contracts. It requires parties to do what they have agreed to do. If unexpected impediments lie in the way and a loss must ensue, it leaves the loss where the contract places it. If the parties have made no provision for a dispensation, the rule of law gives none. It does not allow a contract fairly made to be annulled, and it does not permit to be interpolated what the parties themselves have not stipulated.
We are of opinion that the plaintiff below was entitled to recover, but that the court, in denying to the defendant the right of recoupment, committed an error which is fatal to the judgment.
We might here terminate our examination of the case, but as it will doubtless be tried again -- and the record presents several other points to which our attention has been directed -- we deem it proper to express our views upon such of them as seem to be material.
While a special contract remains executory, the plaintiff must sue upon it. When it has been fully executed according to its terms and nothing remains to be done but the payment of the price, he may sue on the contract or in indebitatus assumpsit and rely upon the common counts. In either case, the contract will determine the rights of the parties.
When he has been guilty of fraud or has willfully abandoned the work, leaving it unfinished, he cannot recover in any form of action. Where he has in good faith fulfilled, but not in the manner or not within the time prescribed by the contract, and the other party has sanctioned or accepted the work, he may recover upon the common counts in indebitatus assumpsit.
He must produce the contract upon the trial and it will be applied as far as it can be traced, but if, by the fault of the defendant, the cost of the work or materials has been increased, insofar the jury will be warranted in departing from the contract prices. In such cases, the defendant is entitled to recoup for the damages he may have sustained by the plaintiff's deviations from the contract not induced by himself both as to the manner and time of the performance.
Judgment reversed and the cause remanded for further proceedings in conformity with this opinion.
See supra, p. 69 U. S. 2.
Paradine v. Jayne, Alleyn 27; Beal v. Thompson, 3 Bosanquet & Puller 420; Beebe v. Johnson, 19 Wendell 500; 3 Comyn's Digest 93.
Bullock v. Dommett, 6 Term 650.
Brecknock Company v. Pritchard, ibid., 750.
Adams v. Nickols, 19 Pickering 275; Bumby v. Smith, 3 Ala. 123, is to the same effect.
Gates v. Green, 4 Paige 355; Holtzaffel v. Baker, 18 Vesey 115.
Cutter v. Powell, 2 Smith's Leading Cases 1, and notes; Chitty on Contracts 612 and notes.

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