Case Name: PHILIP G. JOHNSTON et al. v. STAR BUCKET PUMP COMPANY, Appellant
Court: Supreme Court of Missouri
Jurisdiction: Missouri
Decision Date: 1918-04-27
Citations: 274 Mo. 414
Docket Number: 
Parties: PHILIP G. JOHNSTON et al. v. STAR BUCKET PUMP COMPANY, Appellant.
Judges: Williams, J., concurs; Faris, J., concurs in result; Blair, J., concurs in separate opinion, in which Graves, G. J., and Williams, J., concur; Bond, J., dissents in a separate opinion, in which Walker and Woodson, JJ., concur.
Reporter: Missouri Reports
Volume: 274
Pages: 414–490

Head Matter:
PHILIP G. JOHNSTON et al. v. STAR BUCKET PUMP COMPANY, Appellant.
In Banc,
April 27, 1918.
1. REFERENCE: Compulsory: Issues at Law: Review of Findings in Appellate Court.
Held, by GRAVES, C. J., with whom BLAIR and WILLIAMS, JJ., concur, that a- case involving a long and intricate account, in which every issue is an issue at law, is one for compulsory reference, hut is, nevertheless, a law case, and not the subject of equity cognizance; and that in a case of compulsory reference, where the issues involved are issues purely at law and wherein the trial court has approved the referee’s findings, such findings, so approved, will not be disturbed by the appellate court, if there is substantial evidence to sustain them, but such findings stand in the appellate court upon the same plane as a verdict of the jury in a law case, or as the findings of the court sitting'as a jury in a law case.
Held, by BLAIR, J., concurring, with whom GRAVES, C. J., and WILLIAMS, J., concur, that the mere presence of a long account does not make operative the equitable rule of review on appeal, but the adoption of such a rule in reference cases involving only issues of law would require the appellate courts to review the weight of the evidence in all actions at law involving the examination of long accounts, whether they be cases referred or cases tried to the court or before a jury.
All the reference statutes from the organization of the State govment to the present tiijie, including “Practice in Chancery!’ and “Practice at Law” in Revised Statutes of 1845, and the footnote on page 199 of Revised Statutes of 1855, and all prior decisions, are elaborately reviewed in the two opinions, and the conclusion reached that, whatever may be or has been said of the power of trial courts over the findings of a referee, an appellate court in a compulsory reference case involving only issues at law is bound by the findings of fact made by the referee and approved by the trial court to the same extent as in other actions at law.
Held, by BOND, J., dissenting, with whom WALKER and WOOD-SON, JJ., concur, that a long and intricate account not adapted to a trial by a jury, has been the basis of jurisdiction in equity from the enactment of the first reference statute in 1807 (Geyer’s Digest Mo. Laws, p. 256, secs. 36 and 37) down to the present, irrespective of whether the items of the account are legal or equitable in their nature; and that fact authorizes circuit courts to exercise their chancery powers in dealing with a case of compulsory reference, and the appellate court on appeal to review the findings approved by the trial court and to render judgment as in other equity suits. The former decisions are reviewed, and the conclusion is reached that the decision in State to use v. Parker-Washington Co., 271 Mo. 229, that a review on- appeal in a compulsory reference case can go no further than to ascertain if there is any substantial evidence supporting the judgment of the trial court, is supported neither by the statutes, the Constitution, nor the former adjudications in this and other states.
2. -: -: Effect of Constitution of 1875. Whether or not a long and intricate account throws the case into equity,- the compulsory reference statute is not violative of the Constitution of 1875; for the Constitution only guarantees a trial by jury “as heretofore enjoyed,” and long prior to its adoption the statutes (the same in all their essential provisions as they are now, and as previously interpreted by the Supreme Court) did not permit trial by jury in either actions at law or suits in equity involving long accounts.
3. BUILDER’S CONTRACT: Breach: Architect’s Fraud: Quantum Meruit: 'Counterclaim: Credit for Payments.
Held, by GRAVES, C. J., with whom BLAIR and WILLIAMS, JJ., concur, FARIS, J., concurring in the result, that if the owner of the building breached the contract, by refusing to pay the contractor what was clearly due both by the terms of the contract and by agreement after full examination, he cannot -re-recover in his counterclaim to the contractor’s suit in quantum meruit, as for payments made, for sums he paid sub-contractors to finish the building after his breach, unless they were paid by the contractor’s direction. So that where the contract made the architect the final judge on disputed questions arising during the progress of the building, and payments were to be made monthly for eighty-five per cent of all work and materials in place, upon the certificate of the architect, and at the end of a certain month both the owner and contractor agreed and the architect adjudged that a certain shm was due, but the owner refused to ’pay and because of that refusal alone the architect refused to issue the certificate, the architect was guilty of legal fraud and oppression, and the owner breached the contract by refusing to pay, and can claim, in his counterclaim averring payment, no payments subsequently made to sub-contractors.
Held, by BOND, J., dissenting, with whom WALKER and WOOD-SON, JJ., concur, that the contractor breached the contract, for the reasons (1) there was a dispute between the parties as to thé amount due at the end of said month, (2) the contract stipulated that no payments were to be made except upon the certificate of the architect, (3) the evidence shows the architect refused to issue the certificate because of defective work . and material, (4) in the absence of fraud on the architect’s part the owner was entitled to stand on the contract to pay only on the architect’s certificate, and (5) the contractor has not sustained the burden of showing the architect was guilty of wrongdoing in withholding the certificate.
Held, further, that to permit the contractor, in his suit in quantum meruit, to recover for the reasonable value of the work done and material furnished, while refusing to allow the owner credit for money he actually paid to sub-contractors for finishing the building according to their contracts, is inequitable, and violates the rule that he who seeks equity must do equity, and such credit should be given even when not called for by the pleading.
4. QUANTUM MERUIT: Building Contract: Two Classes of Cases: Measure of Contractor’s Recovery.
Held, by GRAVES, C. J., with whom BLAIR and WILLIAMS, JJ., concur, FARIS, J., concurring in the result, that in Missouri there are two classes of cases in quantum vieruit growing out of violated building contracts: (1) cases where the contractor has breached his contract, and the owner has taken over and used the material and labor furnished by the contractor, and (2) eases where the owner has breached the contract, and the contractor has elected to sue in quantum meruit rather than upon the contract. In the first, where the contractor breached the contract, in a' suit in quantum meruit for material and labor his recovery is so limited as to keep the entire cost of the building within the contract price; in the second, where the owner breaches the contract, the contractor may elect to sue in quantum meruit, ráther than on the contract for damages, and if he does the owner cannot limit his recovery by the terms of the contract, because he himself has breached it.
Held,, further, that if the owner has breached the building contract, the contractor suing in quantum meruiit may recover the reasonable value of the work done by him regardless of what the contract price was, and even though the reasonable value exceeds the amount paid by him to sub-contractors for work done by them. So that where a sub-contractor contracted to do the excavation work for $2700 and was paid that amount by the contractor, but the evidence established that the reasonable value of said work was $3275, the contractor, subsequently suing in quantum meruit, is entitled to recover $3275, and cannot be limited to the contract price of $2700.
Held, by BOND, X, dissenting, with whom WALKER and WOOD-SON, XT., concur, that the only damage sustained by the contractor who has been prevented by the owner from completing the building is the loss of the bargain, and to permit him any greater recovery would be awarding damages as a punishment rather than as a compensation, and quantum meruit ought not to be used as a guise for recovering punitive damages.
Appeal from St. Louis City Circuit Court. — Hon. Wilson A. Taylor, Judge.
Affirmed.
Kinealy & Kinealy for appellant.
(1) Even if defendant’s counterclaim be disregarded entirely, it was gross error to give plaintiff a judgment when, witb all liabilities paid, be bad in bis pocket more than be would bave made bad be completed tbe contract. Drainage Dist. v. Surety Co., 252 Mo. 565; Moore v. Gauss & Sons Mfg. Co., 113 Mo. 98; Harrison v. Franklin, 126 Mo. App. 366; Mitchell PI. M. Co. y. Allison, 138 Mo. 50; Bean v. Miller, 69 Mo. 384; Berthold v. Elect. Con. Co., 165 Mo. 280; Lazar Mfg. Co. v. Pelligreen C. & I. Co., 179 Mo. App. 447; Halpin v. Monny, 57 Mo. App. 59. (2) And if plaintiff were entitled to a judgment it was error: (a) To fix the reasonable valne of the work regardless of his contract, sub-contracts, and monthly estimates, which latter were sworn to by .him as being the reasonable valne of the work. Steele v. Railroad, 265 Mo. 97; Shirts v. Overjohn, 60 Mo. 305. (b) To refuse to charge him with amounts which defendant paid to subcontractors for work done on the building. (3) It was error to render judgment in favor of plaintiff and against defendant on its counterclaim, because: (a) The ground alleged by plaintiff for attempting to rescind the contract, non-payment of the May estimate, did not justify his abandonment of the work and suing on the theory that he was prevented from performing the contract. Laswell v. Handle Co., 147 Mo. App. 497; Fitzgerald v. Haywood, 50 Mo. 516; Puckett v. Nat. Ann. Assn., 134 Mo. App. 501; Turner v. Mellier, 59 Mo. 526; Coal Co. v. Freund P. & M. Co;, 138 Mo. App. 274; Daley v. Carthage, 143 Mó. App. 564. And he is restricted to the reasons he assigned at the time. Railway v. McCarthy, 96 U. S. 258; Goodman v. Pur-nell, 109 C. C. A. 408; McDonald v. Hooker, 57 Ark. 638; Davis v. Dix, 64 Fed. 411; Ins.- Co. v. Burman, 141 Fed. 842; Gibson v. Brown, 214 Ill. 341; Railroad v. Seitz, . 214 Ill. 356; Farmers M. Co. v. Ins. Co., 127 Iowa 318; Sandefur v. Hines, 69 Kan. 171; Wallace v. Minn. Ele. Co., 37 Minn. 465; Frenzer v. Dufrene, 58 Neb. 436; Wyatt v. Henderson, 31 Ore. 55; Harris v. Chipman, 9 Utah, 105; Wright v. Land Co., 100 Wis. 269. (b) There being unpaid lienable claims against the building, defendant had the right under the contract to withhold payment of the estimate. Casey v. Gunn, 29 Mo. App. 14; Dempsey v. Schawacker, 140 Mo. 680. (c) The architect being made the arbiter by the contract and having decided that plaintiff violated the contract and specifications that decision is binding on him. Williams v. Railway, 112 Mo. 463, 153 Mo. 487; Thompson v. St. Charles Co., 227 Mo. 220. (d) The weight of the evidence is that plaintiff did not live np to the specifications (e) The architect did not consent to a deviation from the specifications and had no power to do so. 6 Cyc. 29¡, tit. Builders & 'Architects; 2 Am. & Eng. Ency. Law (2 Ed.), p. 820; Flesh v. Christopher, 11 Mo. App. 483; Fitzgerald v. Moran, 141 N. J. 149; Adlers v. Muldoon, 45 Ill. 193;-Salisbnry v. St. Charles, Í54 Ill. App. 531; Bond v. Newark, 19 N. J. Eq. 376; G-Iacins v. Black, 50 N. Y. 145. (f) There was no waiver or estoppel on the part of the architect because he had no knowledge of the faulty mortar until he made the final examination. Actual knowledge is necessary for estoppel or waiver. Ten-nent v. Ins. Co., 133 Mo. App. 345; Johnson Co. v. Lowe, 72 Mo. 637; Mantel Co. v. Thaler, 133 Mo. App. 86; St. Joseph v. Dillon, 61 Mo. App. 317; Lack v. Brecht, 166 Mo. 242. (g) The contract specifically provides that the architect may condemn material “worked or unworked” and that the contractor will “take down” all work condemned by the architect. Plaintiff cannot be heard to say the contract is too hard. Railway v. Stone Company, 90 Mo. App. 171. (4) Defendant on its counterclaim is entitled to recover all the damage it has suffered and expenses it has been put to growing out of plaintiff’s breach of his contract. 13 Cyc. 156, tit. Damages; Norman v. Van-denberg, 157 Mo. App. 488. This includes damages for delay in completion at the rate contracted for. Dengler v. Auer, Mo. App. 548 ; Cochran v. Railway, 113 Mo. 359; Thompson v. St. Charles County, 227 Mo. 220. Attorney’s fees and expenses of litigation are also proper items of damages. Dempsey v. Schawacker, 140 Mo. 689; State ex rel. v. Tittman, 134 Mo. 162; Coleman v. Clark, 80 Mo. App. 339; Házlett v. Wood-ruff, 150 Mo. 534. (5) Although this court has re cently decided (St. Louis v. Parker-Washington Co., 196 S. W. 767) that, in actions at law compulsorily referred, this court will -not review the findings of fact by the trial court if those findings' are supported by substantial evidence and that court has not abused its discretion. that principle does not apply here, because: (a) The reply attacks the decision and certificate of the architect because of alleged fraudulent conduct on his part, and prays that his decision and certificate be set aside and for naught held. The whole action has thereby been converted into an equitable proceeding-in which this court makes its own finding- of the facts. Edwardson v. Garnhart, 56 Mo. 81; Williams v. Railway, 153 Mo. 495; Yandagrift v. Masonic Plome, 242 'Mo. 154; Sonnenfeld v. Rosenthal, 247 Mo. 250; Reed v. Young, 248 Mo. 613; State ex. inf. v. Lumber Co., 260 Mo. 274. (h) The court did not exercise a reasonable discretion in rendering the judgment in this case. Such facts as it did find were found against the great preponderance of the evidence, it ignored controlling admissions and facts, and it evidently misconstrued the •contract between the parties.
8. G. Taylor for respondent.
(1) The findings of the referee stand before the appellate court in the nature of a special verdict, and if they are supported by substantial evidence the court will not disturb the same. Ferry Co. v. Railroad Co., 73 Mo. 419; Berthold v. O’Hara, 121 Mo. 97; Bank v. Donnell,-172 Mo. 402; State ex rel. v. Fidelity Co., 236 Mo. 375. (2) Failure on the part of an owner to pay an installment due under the terms of the contract, the unwarranted and illegal condemnation of a large portion of the work on the building-which had been constructed according to plans and specifications, and the refusal of the owner to permit the contractor to proceed with the work constitute a breach of the contract and authorize the builder to rescind the same. Little v. Mercer,'9 Mo. 218; Bean v. Miller, 69 Mo. 384; Berthold v. Construction Co., 165 Mo. 303; American Co. v. Butler, 165 Cal. 497; Scheible v; Klein, 89 Mich. 376; Hartón v. Hildebrand, 230 Pa. 335; Canal Co. v. Cordon, 73 U. S. 561; Construction Co. v. Seymour, 91 U. S. 646. (3) “When an owner is guilty of a breach of the building contract after a part of the work has been done and before it is entirely completed, the contractor may rescind the contract and sue for the reasonable value of the work and lab,or performed and materials furnished by him under the contract, and his recovery is not limited to a fro rata part of the contract price. McCullough v. Baker, 47 Mo. 401; Ehrlich v. Ins. Co., 88 Mo. 249; Ahern v. Boyce, 19 Mo. App. 552; Kelly v. Eowane, 33 Mo. App. 440; Smith v. Keith, 36 Mo. App. 567; Dempsey v. Lawson, 76 Mo. App. 522; Cann v. Eector, 111 Mo. App. 164; Motor Car Co. v. Hast, 171 Mo. App. 309; United States v. Behan, 110 U. S. 338; Connell v. Higgins, 170 Cal. 541; Adams v. Burbank, 103 Cal. 646; Cochran v. Balfe, 12 Colo. App. 75; Waitkus v. Olszewski, 189 Ill. App. 332; Waggeman v. Janssen, 74 Ill. App. 38; Folkner v. Purl, 1 Ind. 489; Powers v. Hogan, 12 Daily (N. Y.) 444; North v. Hovey, 26 Yt. 109. (4) Where an architect abdicates his office of arbiter between parties to a contract and acts in collusion with oue of the parties and is manifestly unjust, unfair and oppressive his decisions are not binding upon the other party. Lime Co. v. Shores, 105 Wis. 122; Elevator Co. v. Clark, 80 Fed. 705.

Opinion:
GEAVES, C. J.
Plaintiff, a contractor and builder, sues the defendant in quantum meruit, for the reasonable value of labor and materials furnished in the construction of a three-story brick building in the city, of St. Louis. The petition states a simple action in quantum meruit. In the petition is a full itemized statement of account between the parties, showing the items of labor and materials furnished, and the payments made to plaintiff by the defendant. Such petition asks judgment for the balance of $12,920.68, with interest tliereon from June 9, 1911, and that the plaintiff have adjudged a mechanic's lien on the house and lot involved therein. The petition avers the statutory steps for this statutory lien.
To this petition the defendant filed answer and counterclaim. The answer' is (1) a general denial, with which is coupled an admission that defendant did contract with plaintiff to furnish the labor and material for its building and that plaintiff did certain work thereupon, and (2)- a plea of payment. These two portions of the answer are in fact a general denial and a plea of payment.
The defendant then pleads a written contract with ' plaintiff, detailing with particularity many of the provisions thereof. The answer then avers that the plaintiff breached the contract (stating particulars) and that by reason of the breach of the contract by plaintiff the defendant had been damaged in the sum of $5908, for which defendant asked judgment against plaintiff. With the exception of (1) the general denial and (2) the.plea of payment, supra, each paragraph of the answer is bottomed upon a breach of the contract by plaintiff. ,
The reply admitted the execution of the written •contract, and admitted that the terms thereof were as pleaded by defendant, but averred that 'defendant had breached the contract. The particulars of both answer and reply can be best dealt with in the course of the opinion. This outline suffices to show the character of the issues.
The trial court sent the case to a referee who took the testimony, made findings upon the issues of fact, and recommended that judgment go for the plaintiff in the sum of $7442.75, with interest at six per cent from June 1, 19DL1. Upon a review of the referee's findings, the court concluded that the referee had erred in two instances — one in the sum of $200 and another in the sum of $1425.14 — and such court deducted these sums from the amount of the judgment recommended by tlie referee,- and otherwise approved the finding's of the referee, and directed judgment for plaintiff in the ' sum of $5818.31, with interest, at six per cent, from Jnne 1, 1911, to date of judgment. Judgment was entered accordingly.
The court also entered judgment against the defendant on the counterclaim, so that the defendant not only lost its counterclaim for $5908, hut lost its claim of payment, and had a judgment against it for over $6000, including the interest. These details we give to show our jurisdiction on this, the defendant's appeal.
Reference: Long Account Law Action or Equity Suit: Review of Statutes.
I. Every issue in this case is an issue at law and not in equity. It is true that there is a long account involved, such as would make the ease one for compulsory reférence, and the case was properly referred. The parties did not object to the reference, bnt objections would have been unavailing, because as said, the character of the account is such as authorized a compulsory reference.
It has been urged that long and intricate accounts are subjects of equity cognizance, and that cases to that effect may be found I have no doubt. But the question is, how have long and intricate accounts, in cases otherwise purely cases at law, been recognized in this State? Have long and intricate accounts been classed in equity or at law? We say at law, and not in equity.
To start with, it required no statute to authorize a reference in- equity. This was one of the powers of a court of equity, and such courts had the power to either appoint a master for a term, or a special master in the particular case. [16 Cyc. 429 et seq.] If the mere fact of there being a long and intricate account involved threw the case in equity, then the chancery courts could have the accounting taken before their master or commissioner, and no reference- statute was necessary in such case. Our law-makers did not so view the matter. From the earliest legislation down to the present, we have viewed long and intricate accounts (there being no other matters of equitable cognizance in the case) as issues at law, and not as issues in equity. The very best evidence of our views of the matter is found in the fact that we concluded it to be necessary to pass a law for compulsory reference. No law was necessary if the long and intricate account of itself threw the case into equity. But a tracing of our reference .laws shows that by law we have always placed accounts of this character on the law side of our jurisprudence, and not upon the equity side. This matter wq take up presently.
In this case able counsel for appellant asks us to review the rule announced in St. Louis to use v. Parker-Washington Co., 271 Mo. 229. It might be well to restate that rule before tracing the history and development of our reference statutes. The Parker-Washington Company case simply holds that in a case of compulsory reference, where the issues involved are issues purely at law, and where the trial court has approved the findings of fact made by the referee, such findings, so approved, will not be disturbed by this court, if there is substantial evidence to support such findings. In other words, that this court, in such' case, will not review the evidence to determine its weight, but will only review the evidence to determine the fact as to whether or not there is substantial evidence to support the findings. Such findings in such a case stand here upon the same plane as the verdict of a jury in a law case, or as the findings of a court in a law case where no jury has been called. Such is the rule of the Parker-Washington Company case, and such rule is fully sustained by the history of our reference laws, as well as by the well considered case law of the State.
It has been suggested that our original statute as to references is found in the Laws of 1848-9 at page 91. To this I do not agree. Long before that we had reference statutes, and long before that, long accounts, in eases that were otherwise cases at law, were placed and classed as issues of law. But let us get the facts from the hooks.
In Laws of Missouri of 1825, vol. 2, it will he seen that we had two Practice Acts. Prom page 620 to 636 of said Volume 2 is the Practice Act for cases at law. It is made up of two chapters and is headed, "Practice At Law." Following this, at pages 636 to 648, is the law governing practice in chancery cases. This is a single act of fifty sections, and is entitled, "Practice in Chancery." These two separate Practice Acts continued until the Act of 1848-9. Now, hearing in mind the two distinct acts, one for law matters and one for chancery matters, let us trace the real origin of our reference law. Section 35 of Chapter 2 of the Act entitled "Practice at Law," Laws of Missouri (1825), vol. 2, p. 630, is ,a reference statute. It provides that "if .neither party requires a jury, the law and the facts may be determined by the court, or the court may refer such cause to three or more indifferent and competent persons, whose report, if approved by the court, shall have the same effect as a verdict by a jury." This was our first reference - statute. 'Note the force and effect given to the report of the referees, when approved by the court — "the same effect as a verdict by a jury." Such was the holding in St. Louis v. Parker-Washington Co., 271 Mo. l. c. 241.
But further, in Laws of Missouri (1825), yol. 1 p. 138, under the head of "Arbitrations," we have in Section 4 of that act a reference statute pure and simple. This section provides for a consent reference; whereas, Section 35, p. 630, vol. 2, Laws of Missouri, was not a consent reference. Under this Section 35, if the parties waived a jury, the case was triable by the court or by a referee at the option of the court, and not the option or consent of the parties. ' In other words, once a jury waived, the reference was compulsory, and the findings of the referee, when approved by the court, stood as the verdict of a jury. Thus the origin of references in Missouri, and they had their place only in actions at law. This was trne because in chancery cases there was no need for a referee. The court had its master in chancery, to whom could be referred all matters, including the taking of an accounting, if such was necessary in the cause pending in chancery.
Now, when we reach the Statutes of 1835, the matter is made more explicit. In the Missouri Statutes of 1835, the circuit courts, by express provisions of Constitution and law, exercised both law and equity jurisdiction. [R. S. 1835, p. 32 and page 155.] In equity they proceeded according to the rules, usages and practice of courts of equity. Then there was a distinct' act of six chapters governing the "Practice in Chancery." [See R. S. 1835, pp. 506 to 517.] In the Statutes of 1835, at page 450, will be found the Practice Act (in seven chapters) governing courts of law. It is entitled, "Practice at Law." Section 15 of Article 4 of this Act (R. S. 1835, p. 463) reads:
"All issues of fact joined in any suit, in any court of record, shall be tried either by the court, by a jury, or by referees:
"First, The trial shall be by the court, when neither party shall demand a trial by jury, and the cause is not referred.
"Second, It shall be by jury, when either party shall demand such trial and the cause is not referred.
"Third, It shall be by referees, when the court is authorized to refer the trial, and shall have referred it''accordingly. ' '
This provision has reference to actions at law, pure and simple. Now, when we turn to Section 17 of article 5 of the same laws (R. S. 1835, p. 467.) we will see just when the case may be referred. This Section 17 reads:
"Whenever an action shall be at issue in any court of record, such court may with the consent of the parties thereto, in its discretion, order such cause to be referred to one or three impartial and competent men; and when it shall appear to the court, that the trial of such action will require the examination of a long account on either side, such court mag, without such consent¡ make the same order of reference
Here we have the consent reference and the compulsory reference, just as we had in Statutes of 1825> hut in one section rather than in two. Here we have long accounts as the basis of a compulsory reference, hut it must he borne in mind that it is long accounts in law actions and not in cases in equity. So far references are purely in law cases, and a referee an arm of a court at law and not a court of equity.
By Section 17, supra, we have the authority for an order of reference. The proceedings of the referee will he found on page 74 of Statutes of 1835. Section 26 on that page says: "The referees appointed in pursuance of any order of reference, shall proceed, with diligence, to hear and determine the matter in controversy." Other sections provide how they shall proceed, and finally Section 32 (p. 74, Statutes of 1835) fixes the force and effect of the findings in this language: "If the report of the referees he confirmed by the court, judgment shall be rendered thereon, in the same manner, and with1 like effect, as upon the verdict of a jury. '
Is there any resemblance heré to the rule in Parker-Washington Company case?
But let us get the distinction clear. Up to this time in our legal history referees are referred to only in eases at law. In the chancery court we had a commissioner, not a referee. [Statutes of 1835, p. 512.: Statutes of 1825, vol. 2, p. 641, sec. 28.] Throughout the two were separate. In equity, commissioners; at law, referees. Long and intricate accounts are placed under the head of law actions and not chancery actions.
Passing now to the Statutes of 1845, let us see the status. -Here we have two Practice Acts, as in 1825 and 1835. "Practice in Chancery," an act of six chapters, Statutes of 1845, pp. 835 to 853, and "Practice at Law," an act of seven chapters, pp. 804 to 835'. Under "Practice in Chancery," the court appointed a commissioner, [Statutes 1845', p. 845, section 1, article 4.] Under "Practice at Law." the court appointed a referee or referees. [Secs. 23 and 24, Art. 5, of Practice Act, Statutes of 1845', p. 825.] These two sections authorize a court at law to make an order of reference. Section 23 relates to consent references, hut Section 24 is the one in point here, and it reads:
"When it shall appear to the court, that the trial of such action will require the examination of a long account on either side, such court may, without such consent, make the-same order of reference."
Then under Section 20 of Article 4, "Practice at Law" act, Statutes of 1845, p. 819, we have this:
"All issues of fact joined in any suit, in any court of record, shall he tried, either hy the court, hy a jury, or hy referees: First, The trial shall he hy the court, when neither party shall demand a trial hy jury, and the cause is not referred; Second, It'shall he hy jury, when either party shall demand such, trial, and the cause is not referred; Third, It shall he hy referees, when the court is authorized to refer the trial, and shall have referred it accordingly."
Then, as in 1835, we have a section of law prescribing the duties and procedure of referees. Thus Section 27, p. 126, Statute of 1845, reads:
"The referees appointed in pursuance of any order of reference, shall proceed with diligence to hear and determine the matter in controversy."
Then, hy Section 33, on said page 126, supra, we have the force of their findings, thus:
"If the report of the referees h.e confirmed hy the court, judgment shall he rendered thereon, in the same manner and with like effect, as upon a verdict of a jury."
So throughout references have been arms of courts at law, and not of courts in equity. Throughout their findings have been as verdicts of juries, and throughout long accounts have been the subjects of references in courts of law. And throughout there has thus far been a clear distinction between. a commissioner in chancery and a referee in a law case.
Bnt we are cited to tbe Act of 1848-9, p. 91, as antbority for tbe position, that a long account wbicb is referred tabes tbe cause into equity ratber than at law, as it bad gone prior to this act. By this Act of| 1848-9 (Laws 1848-9, p. 73) we reformed our practice acts. Distinctions between law and equity were abolished, and provision made for "but one form of action for tbe enforcement or protection of private rights, and tbe redress or prevention of private wrongs, which' shall be denominated a civil action." We fully understand this act. But it is hardly necessary to say (in view of repeated rulings) that under this act if tbe things stated in tbe petition were of tbe kind theretofore beard by courts of law, such petition would be beard on tbe law side of tbe court and, as a case at law. On tbe other band, if tbe petition counted in what bad theretofore been cognizable in chancery, such petition would be beard on tbe equity side of tbe court, and' as a cause in chancery. In other words, this act did not make what was theretofore cognizable in law cognizable in equity, or vice versa. We have seen that long accounts were theretofore cognizable in law and not in equity. In other words, beard before a referee, tbe arm of a court at law, and not before a commissioner, tbe arm of a chancery court. ' Don't understand me to say that a commissioner in chancery could not take an accounting, for be could, if tbe cause was for other grounds in chancery. What I do mean is that in this State a very long or intricate account did not place a case in chancery on that ground alone, but on tbe contrary tbe law provided a referee, an arm of a court at law, to take such an accounting.
Section 5 of Article 16 of tbe Practice Act of 1848-9, p. 91, is urged as authority for tbe claim that tbe cause was transferred to equity, but this overlooks Section 4 just above it, wbicb specifically authorizes tbe appointment of a referee. When it is considered that tlie act was dealing with, both classes of cases (those theretofore cognizable at law, and those theretofore cognizable1 in equity) it can easily be.seen how two provisions were made when one might have answered. But we shall not burden this opinion with Section 5, so much relied up op as the basis of the claim that we must review the facts as in equity. It was of short life. It blossomed in the morning and died with\ the setting of the sun. It hardly made a ripple on the flowing stream;
Passing now from the Statutes of 1845 to the Statutes of 1855, and passing in dignified and quiet respect over the dead and mouldering body of the said Section 5, p. 91, Laws of 1848-9, let's see the continued status of the law as to the referees. Section 12 of Article 10, Statutes of 1855', vol. 2, p. 1261, reads:
"An issue of fact in an action for the recovery of money only, or of specific real or personal property, must be tried by a jury, unless a jury trial b.e waived, or a reference ordered, as hereinafter provided.
Note the fact that these are all actions at law. The "hereinafter provided" is found in Sections 17, 18 and 19, following. Section 17 refers to reference by consent. Section 18, so far as pertinent, reads:
"Where the parties,do not so consent, the court may, üpon the application of either, or of its own motion, direct a reference in the following cases: First, Where the trial of an issue of fact shall require the examination of a long account on either side, in which case the referees may be directed to hear and decide the whole issue, or to report upon any specific question of fact involved therein."
We have above the character of cases in which the reference may be ordered. They are cases at law-and cases with long accounts. Now as to the effect of the findings we have to turn to another statute, which deals with the subject.
Section 27 of Chapter 7 (Statutes of 1855, vol. I, p. 199) reads: "The referee or referees, appointed in pursuance of any order of reference, shall proceed with diligence to hear and determine the matter in controversy."
Section 42 of the same chapter reads: "If exceptions are allowed, the matter may again he referred, with instructions, if necessary; hut, if the report is confirmed by the court, judgment shall be rendered thereon, in the same manner and with like effect as upon a special verdict."
These laws remained intact in the General Statutes of 1865. [Vide Sections 12, 17, 18 and 19, Chapter 169, General Statutes 1865, pp. 673 and 674.]
So, too, Section 27, Chapter 198, General Statutes of 1865, p. 773, provides that the referees shall proceed with diligence; and Section 42 on page 775 provides:
"If exceptions are allowed, the matter may be again referred, with instructions, if necessary; but, if the report is confirmed by the court, judgment shall be rendered thereon, in the same manner and with like effect as upon a\ special verdict."
Going now to the Revised Statutes of 18791 (which are after the adoption of our present Constitution), we find Section 3600, which reads as follows:
"An issue of fact in an action for the recovery of money only, or of specific real or personal property, must be tried by a jury, unless a jury trial be waived, or a reference ordered, as hereinafter provided."
Note the trial shall be by jury, unless it be waived, or unless a reference is ordered "as hereinafter provided." This "hereinafter provided" is found in Sections 3605 and 3606, following. They read:
"Sec. 3605. All or any of the issues of fact in the action may be referred, upon the written consent of the parties.
"Sec. 3606. Where the parties do not so consent, the court may, upon the application of either, or of its own motion, direct a reference in the following cases: First, where the trial of an issue of fact shall require the examination of a long account on either side, in which case the referees may be directed to hear and decide the whole issue, or to report upon any specific question of fact involved therein."
There is no common construction which would allow us to say that the phrase "or a reference ordered, as hereinafter provided" has reference to Section 3605 only. It clearly refers to both sections, 3605 and 3606. The law starts out with pure law cases in Section 3600, and the reference referred to is specifically in such cases. The next section (Sec. 3601) refers to equity cases, and it says the issues in such cases may be tried by the court, or the court "may refer it, as hereinafter provided." So that both law and equity eases may be referred "as hereinafter provided." That is to say, they may be referred by consent, or they may be referred (in proper conditions) by compulsion.
Section 3623, Revised Statutes of 1879, reads:
"If exceptions are allowed, the matter may again be referred, with instructions, if necessary; but' if the report is confirmed by the court, judgment shall be rendered thereon, in the same manner and with like effect as upon a special verdict
A special verdict is defined by statute. [Sec. 1988, R. S. 1909i.] It has likewise been construed by this court. [Shipp v. Snyder, 121 Mo. l. c. 161.] A reading of these may obviate some loose thought, recently expressed in this case.
These several sections, supra, run through all of our statutes down to 1909. They are in exactly the same terms. Section 3600 of the Revised Statutes of 1879 is Section 1968 of the Revised Statutes of 1909; Section 3601 of 1879 is Section 1969 of 1909 ; Section 3605 of 1879 is Section 1996 of 1909; Section 3606 of 1879 is Section 1996 of 1909; and Section 3623 of 1879 is Section 2013 of 1909.
The trouble with our case law is that we have tried, in some eases, and without either rhyme or reason, to limit the phrase "or a reference ordered as hereinafter provided" in Section 1968, Revised Statutes 1909, to the consent references mentioned in Section 1996, rather than to give them their fall meaning as referring to all references thereinafter named. When the law is traced as I have done, and the relative position of these several sections in the divers statutes is considered, it is easy to discover wherein trouble may have arisen.
Throughout, long and intricate accounts in law cases have been made the subjects of reference, rather than a jury trial; throughout, accounts of this character have not been, by our statutes, recognized as equitable, or as the means of throwing cases into equity. Throughout, the findings of the referee, if approved by the court, has had the effect of a special verdict.
When the divers sections are read together (R. S. 1909, secs. 1968, 1969, 1995, 19(16 and 2013) it cannot be said that it is only in consent references that the findings of the' referee, when approved by the court, shall have the effect of a special verdict. Said Section 2013 has in view all references.
It is true that there is a footnote on page 199, Revised Statutes 1855, which says that the reference statutes in the Statutes of 1855,• on said page 199 and following, were taken from article 4 of. the Chancery Code of 1845, and we are cited to this footnote for authority. Writers of footnotes are not always accurate, and this footnote is not sustained by the facts. We bespeak a careful examination of the facts. To begin with, Article 4 of the Chancery Code of 1845 (R. S. 1845, p. 845) had but fourteen short sections, all relative to commissioners in chancery, whilst the reference laws of 1855 (Revised Statutes 1855; p. 199', et seq.) has twenty elaborate sections, some of them quite elaborate, thus showing a re-writing of the law — in other words a new statute. But this is. not all. We shall point to the places from which most of the sections of the Statutes of 1855 came. Turning to page 199 of Revised Statutes 1855, under the head of "References" the first section is 27 and we find this section an exact rescript of' Section 27, Chapter 9, Revised Statutes of 1845, page 126i, and is not in the Chancery Code of 1845 at all. The Chancery Code is Chapter 137 of Revised Statutes of 1845, pages 835 to 853-. Section 28, page 199, Revised Statutes of 1855, is new. It is not found in Chancery Practice of 1845. Section 29 is likewise new.
Section 30, page 199, Revised Statutes of 1855, is an exact rescript of Section 29, Chapter 9', Revised Statutes of 1845, page 126. Section 31, page 199, Revised Statutes of 1855, is a practical rescript of Section 28, Revised Statutes of 1845, page 126. Section 32, page 199, Revised Statutes of 1855, comes from Section 30, p. 126', and Section 4, p. 122, of Revised Statutes of 1845, and not from the Chancery Act of 1845. Section 33, p. 200, Revised Statutes of 1855 (pertaining to the using of depositions before referees) is a new section in the reference law. There was a section of similar import in the Chancery Act, but not in the same language. Section 34, page 200, Revised Statutes of 1855, is practically a rescript of Section 31, Chapter 9, page 126, Revised Statutes of 1845. Section 35-, page 200', Revised Statutes of 1855, is an exact rescript of Section 32, Chapter 9, page 126, Revised Statutes of 1845. Section 36', page 200, Revised Statutes of 1855, is a new section, and is in neither the previous Reference Statutes, nor the Chancery Practice. So likewise are Sections 37 and 38. Section 39, page 200, Revised Statutes 1855, is taken from the Chancery Practice of 1845, and is a rescript of Section 9 of Article 4 of that act, substituting the words "referees" for "commissioners." The section relates only to the saving of exceptions to the competency of witnesses. Section 40, page 201, Revised Statutes of 1855-, is new. Section 41, page 201, Revised Statutes of 1855 (pertaining to time when exceptions to report of referees shall be filed), is a practical rescript of Section 11, Article 4, of the Chancery Act of 1845, substituting the word "referees" for "commissioners." Section 42, page 201 of 1855, is a practical rescript of Section 33, Chapter 9, page 126, Revised Statutes of 1845. Sections 43 and 44, page 201, Revised Statutes of 1855 (pertaining to bow notices and subpoenas issued by referees may be served), are new, but tb'ere were similar provisions in tbe Cbancery Code. So that it will be seen that every substantial section of the Revised Statutes of 1855 have come from the reference laws of 1845', and not from the Chancery Practice of 1845. Only three insignificant sections out of the twenty came - from the Chancery Practice Act of 1845. How the writer of the footnote got such an idea is beyond comprehension. We ask pardon for this long review of the reference laws of 1855, but the reliance placed on this erroneous footnote required it. So that we again repeat that in references, if the ease is one at law (and long accounts have always been at law) the findings of the referee stand as special verdicts of a jury, when they have been approved by the trial court. The trial court can cut out items which have no support in the evidence. Verdicts may be set aside when not supported by evidence. But this court will not and should not weigh the evidence, where the evidence conflicts, anymore than it would weigh the evidence on the verdict of a jury where the evidence conflicts.
In all other cases at law, tried before a court, without the intervention of a jury, we say that we will not weigh the evidence to determine the correctness of the court's findings of fact. Such findings of fact, like verdicts of a jury, are binding here, if supported by substantial evidence. Why shouldn't such rule prevail in law cases, wherein a reference is compelled by reason of a long account? The history of reference statutes, and their sundry provisions, sustain the views expressed in the Parker-Washington Company case, supra. Sound reason is with the rule • announced in that case, and the well considered case law of this and other states sustain it.
In the case at bar there is substantial evidence (and more) to sustain every finding of fact approved by the court. In such case this court is powerless to disturb the findings of fact, and the judgment should be affirmed.
II. That the mere fact of there being a long and intricate account in an action, otherwise purely an action at law, does not make such case a cause in equity, is not only established by the history of the ^aw reference, as above detailed, but it has been so recognized by this court. This recognition has been in cases where the constitutionality of the compulsory reference law has been attacked..
We have held this compulsory reference statute as not violative of the Constitution of 1875, and not on the ground that a long and intricate account threw the case into equity, but on the ground that our Constitution only guarantees the right to trial by a jury "as heretofore enjoyed." We hold that long before the adoption of the Constitution there was no right to a trial by jury in law eases involving long and intricate accounts, and for this reason the Constitution was not violated by our compulsory reference statute. [Wentzville Tobacco Co. v. Walker, 123 Mo. 662; Ice Co. v. Tamm, 138 Mo. 385; Tinsley v. Kemery, 170 Mo. 310.] These cases cite and discuss a great number of cases. The effect of all is that • a long and intricate account does not change an otherwise law case into an equity case, but that such cases still remain cases at law, and a trial by jury cannot be had therein by the mandate of the Constitution, because such cases had not been tried by jury prior to the adoption of the Constitution. So that with the doctrine of the Parker-Washington Company case, and the cases therein cited, we are still satisfied. And why not? Why say if a court tries a negligence case, or any other case at law, and finds a judgment in the sum of $10,000 and that case comes here upon, appeal, we cannot disturb the findings of fact, and yet say in a reference, in a pure law action, we will search the whole record to see whether or not the weight of the evidence shows that a little mortar came np to contract requirements, or that $50 worth of glass was single or double thickness? The history of reference laws and their specific provisions contemplate no such thing. If long accounts made equity cases of them, then there was no need in all this legislation as to compulsory reference. Chancery courts, even at common law, could refer to their master any questions involved in the controversy. References in common law actions were unknown, and hence the necessity of these statutes.
Nor is there substance in the contention that long accounts in law actions prior to the Constitution of 1875, should have been heard before a jury under the prior constitutions, and therefore under the Constitution of 1875 they should now he so heard. In 1851, in Shepard v. Bank, 15 Mo. l. c. 150, the validity of the compulsory reference statute was challenged on constitutional grounds. It was urged that it trenched upon the constitutional right to trial by jury. This court upheld the statute. So that for years prior to the adoption of the present Constitution no trial by jury in law cases involving long accounts had been permitted or enjoyed. This under the express ruling of this court in Shepard's case, supra. Our present Constitution only gives the right to trial by jury "as heretofore enjoyed." The right to a jury in law cases involving long ccounts had not been "heretofore enjoyed" when our present Constitution was adopted, and hence trial by jury in such cases was not preserved in this Constitution.
For the sake of the argument we might admit that this court was wrong in Shepard's case, and that law cases having long accounts should have been triable before a jury and not a referee. But they were not so tried. Whether rightfully or wrongfully makes no difference. Our present Constitution only guarantees the right to jury trials where such right had been theretofore enjoyed. In law cases with long accounts, both by statutes and the ruling of this court, the right to trial by jury had been denied in such cases, and no such right had been' enjoyed for years before our present Constitution. The right is therefore excluded by the very terms of the present Constitution.
But as neither party demanded a jury or objected to the reference made, this question is not in this case. '
III. But even if we concede that it is the duty of this court to weigh- the evidence, the evidence when weighed shows that defendant breached the contract, and practically the whole answer falls to the ground. I shall now proceed on the theory that it is our duty to review the evidence and make our findings. As to who breached the contract is a pivotal question in this case, because upon it depends the applicable law. The referee found that the defendant had breached the contract, and, of course, applied the law applicable-to such case. It stands without contradiction that the defendant refused to pay $9000' due on June 1st. It is urged that there is no evidence of the fraudulent conduct of tbe architect, and there is quoted a line or two from the referee's report, but not a syllable from the evidence. That the real facts of this case may appear I am glad to go to the record, for they show overwhelmingly that both in character of material and quality off work plaintiff was living up to his contract, unless it be as to the character of the cement used under the following two clauses of the specifications: "The-fire walls to be covered with wall coping laid in Portland Cement," and "Last five courses of chimneys to be laid in Portland Cement mortar." These the subcontractor under plaintiff offered to make good prior to defendant's refusal to pay. But we are adrift from the thought in mind at the beginning of this paragraph. That thought was, who breached the contract?
In answering this question we shall not deal in glittering generalities, but in plain record facts. Article 9 of the contract, page 107 of the record, furnished by appellant, reads:
"It is hereby mutually agreed between the parties hereto that the sum to he paid by the owner to the contractor for said work and materials shall be $31,607, subject to additions and deductions as hereinbefore provided, and that such sum shall be paid by the owners to the contractor, in current funds, and only upon certificates of the architect, as follows, as per clause 21, page 7, of the specifications."
Now turning to the specifications referred to in article-9 of the contract, we find that it reads:
"21. 'Payments shall be made monthly (unless otherwise provided) for eighty-five per cent of all work and materials in place.
"Estimates for said work shall be approved by the architects from estimates submitted by the' sub-contractors. TJpon final completion and acceptance of the work all unpaid balances shall be liquidated within ten days."
As evidence of the fact that defective work or material was not to preclude these partial payments, we find paragraph 22 of the specifications reads:
"Monthly or partial payments, except the final payment, are not to be construed as conclusive evidence of the satisfactory performance of this work, either wholly or in part, and that no payment shall be considered or regarded as an acceptance of defective work or improper materials."
The referee makes this finding, that is of value here:
"The defendant relies upon that provision of the contract making the architect the final judge on disputed questions arising during the progress of the building.
"Mr. Powers, the architect, testified very frankly when asked his reason for not issuing his .certificate on the May estimate, as follows:
"Q. Didn't you tell Mr. Johnston (the contractor) that before you would issue a certificate you would have to talk with Mr. Dowling (the owner) ? A. I make it a rule .-always to do that, Mr. Taylor.
"Q. Didn't you tell Mr. Johnston that you thought •it was your duty to issue the certificate? Did you say that to Johnston? A. It was my duty to issue it under the contract with this building.
' "Q. Didn't you tell him it was your duty to issue the certificate at that time; that you wanted to do it? A. It was my duty under the contract to issue a certificate; whether- I told him that at that time I don't know, hut it was my duty under the contract to issue the certificate.
"Q. For the work done during the month of May? A. Tes, sir.
"Q. You told Johnston that fact, didn't you? A. No, I didn't tell Mr. Johnston that fact; I don't know that I did. It was my duty to issue it, wholly without regard to what I told him.
"Q. Didn't you tell him you would issue it, hut that Mr. Dowling forbade you doing so? A. It might have been.
"Q. Don't you know? A. I don't know whether I did or not. If I told him that, it was because I thought it wouldn't he paid; when I issue a certificate, I want to know it is all right, and going to he paid, before " I let it go out of my office.
"Q. Mr. Dowling told you not to issue it, didn't he? Yes, or no. A. No, I think Mr. Dowling told me that he yrouldn't pay it.
"Q. Didn't he tell you that you shouldn't issue it 'because he would not pay it if you did? A. No, he told me he wouldn't pay it. Then I said, there is no use of my issuing it.
"Q. That is the reason you didn't issue it. A. I think that is the final reason.
"The architect testified to the same effect in his deposition on file, pages 29-31."
The abstract of the evidence made by appellant shows the facts as found by the referee. Vide page 163 appellant's abstract of record on file here. There it is said:
"The contract provides that eighty-five per cent shall be paid at the beginning of the month. For the work done previous to April, I issued a certificate about April 2nd, for tbe amount less fifteen per cent, and for tbe month of April I issued a certificate, about tbe 4th or 5th of May, which was paid; I did^not issue the certificate which should have been issued about June 1st. It was my duty under the contract to issue the certificate but I refused to do it, because I found it would not be paid. The amount it would have been issued for was approximately $9000. There was no dispute as to the amount. It is correctly stated in my deposition that I started the certificate and asked Dowling if he had the money convenient and that he asked me how much it was and later told me that he had decided not to pay it. I believe I found Mr. Johnston a perfectly straightforward man and' if he was not he would have heard from me."
But this is not all. The evidence shows that when Mr. Johnston, the plaintiff, presented his • estimate of work for the month of May, two items therein were objected to by the architect, Powers; that thereupon Johnston and Dowling (the president of defendant) met at Powers's office, and the three went over this estimate, and it was agreed that it should be reduced to $9000, instead of $9221.25, by reducing the plumbing estimate from $475 to $303.75, and insurance from $100 to $50. Vide, appellant's abstract of record, page 93. This is the testimony of Johnston, which is corroborated by the testimony of Powers, supra. But this is not the only corroboration. The defendant introduced in evidence this estimate of Johnston, which shows just what was done. Defendant's Exhibit No. 29, and the notes thereon on pages 126 and 127 of the appellant's abstract of record, read:
"St. Louis, May 31, 1911.
"Mr. H. W. Powers, Architect.
City.
"Dear Sir:
"The following is my estimate for work in place at the Star Bucket & Pump Co.'s building, 1220 N. Fifteenth St.: •
"Excavating .$ 2700.00
Concrete, Masonry & Cut Stone . 2300.00
Iron Work . 2000.00
Brick Work . 5100.00
Lumber . 3000.00
Carpenter Work . 1700.00
Mill Work. 700.00
Plumbing and sewering . 475.00
Sprinkling.1150.00
Steam Heating . 1600.00
Sheet metal work . 100.00
Bond & Permits . 200.00
Liability Insurance . 100.00
$22025.00
"Less 15% . 3303.75
$18721.25
9500.00
"Balance.$9221.25.
"Stenographer's note:
"The item * Pluming & Sewering, $475.00;" the amount '$475.00' is crossed out, and opposite same in lead pencil appears the amount '$303.75.'
"Also, the item 'Liability Insurance, $100.00;' the amount '100.00' is crossed out, and above same in lead pencil appears the amount '50.00.'
"Also, opposite the footing, '$22025.00' appears in lead pencil the amount '21803.75.'
"Also, the balance of '$9221.25' is crossed out, and underneath in lead pencil appears the amount '$9000.00.'
"Respectfully submitted,
"P. Gr. JOHNSTON & Co.,
"Per JOHNSTON."
This corroborates both Powers and Johnston as to the agreement upon $9000 for the May estimate. Dowling in his testimony claims that the agreement was on an amount over $8000, but less tban $9000. Tlie amount is not very material, but it is material that aN certificate of allowance was due to plaintiff, and the architect would not issue it, and, it is material, as the evidence shows, that defendant's president said that it would not be paid, if issued.
It is urged that there is no evidence of fraudulent or wrongful conduct, upon the part of this architect, who by the contract was made the arbiter between plaintiff and defendant. Counsel contend, in order to find that plaintiff breached the contract, that the requirements of this arbiter were not met, and cites a number of letters passing between the parties, after the architect refused to issue this certificate due June 1st.
Under the contract it was the duty of Powers- to issue the certificate of indebtedness on June 1st. Under the contract it was the defendant's duty to pay the same, but through its president it said that it would not pay. Powers, the arbiter, admits it was his duty to issue this certificate, which fixed the then liability, but says he refused because Dowling said that he would not pay it. This-was no small sum, but practically one-third of the contract price. To say that this act of Powers was not tinctured with legal fraud and oppression, is to wipe out of this record the admissions of Piowers, wh'o was a witness for defendant, as well as the practically undisputed other evidence in the case. To illustrate: Suppose a circuit judge were trying a case; suppose, like the arbiter Powers in this matter, such judg¿ had all the facts before him, and then spread of record that "under the facts judgment should go for plaintiff for $1000, but defendant says he will not pay such a judgment, therefore I find for the defendant." "Would there be any legal fraud couched in that judgment? Does it take a lawyer to conclude that there would be?
In the case at bar, this architect "oí high professional standing and experience," to use the language of another, on May 31st (note the date and see Dowling's testimony also for the date) had the parties before him, and says that when they got through there was no dispute as to the amount for which he should issue a certificate, and further says that he should have issued it June 1st, but that he did not issue it solely because Dowling said he would not pay it. That plaintiff was entitled to the certificate, and through the certificate to the payment of $9000, he admits, and yet he refused to perform this plain legal duty. Yet it is said that this act of an arbiter which deprived the plaintiff of a right, does not rise to the dignity of fraud. It mates no difference whether the situation shows fraud in fact or fraud in law, the consequences are the same. If these facts do not show fraud, partiality and oppression upon the part of this arbiter, the definitions of these terms will have to be rewritten.
Now this agreement as to the amount of the May estimate was on May 31st. The certificate was due to plaintiff on June 1st. It was not issued because Dowling said he would not pay 'it. This was then the breach of the contract by defendant. Paragraph 22 of the specifications, supra, fully protected defendant from all defective material and work, if as a fact there was any such. The weight of the evidence shows that there was not. At least there was no excuse for this refusal to pay.
After this, on June 2nd (Abstract, p. 93), this arbiter suddenly finds that all the brick work on the second and third stories of this b,ig building had not been done with the mortar called for by the contract, and writes a letter demanding that it all be torn down and rebuilt. It is at this point that counsel for defendant starts the case. We start with the refusal to pay. When this record is read there can be no question that the first breach of this contract was by the defendant.
IV. Nor is the above all in this record that tends to show fraudulent and wrongful conduct upon the part of this architect. Of course, he says that Dowling did not tell him to refuse to issue the certificate. Of course, ' Dowling testifies that lie did not tell Powers not to issue the certificate. Nbr do highwaymen come into court and admit that they either jointly or' severally committed the act. Fraud in fact is not usually proved by the direct admissions of the parties thereto, hut usually by circumstances which overcome the express denials of fraudulent conduct. Let us see the surroundings of this case. When I say this, I mean, let us read the real record. Up to May 31st there had been no complaint about this work. This is the day, according to Dowling, that he was in the architect's office, when Johnston came in with the May estimate. This estimate was given to the architect and was put in evidence by defendant with the pencil changes thereon, which showed that the parties got together on the sum of $9000. This architect had been in the building from one and one-half to two hours each morning and evening (three to four hours each day) during the whole -time. He saw the walls go up from foundation to the coping of the fire walls. The building was to the point of putting on the roof. Not a complaint had been made.
It would appear that after Dowling told Powers that he would not pay the certificate if issued, and on May 31st, Powers wrote a letter complaining about the mortar used in fire walls, chimneys, stack and pent house, and these changes could have been made for $40 to $50. Part of this the subcontractor offered to do without charge. This was the first step after the architect judicially determined not to issue the certificate because Dowling said that he would not pay it. The big stride was not taken until June 2nd, when the architect suddenly discovers that all the brick walls in the second and third stories of the building had not been placed with mortar in accordance with the contract, and he directed that this be remedied within three days. Don't forget at this point that this architect had been on this building three to four hours each day whilst these walls were going up. Don't forget that the men say he saw the mortar mixed, and he does not deny it. On the 6th, he concludes that $500' should be allowed the owner for this alleged defective mortar. Just a, small bite of pie for his employer and paymaster. Bnt this is not all. Prom pages 57 to 140 appears plaintiff's evidence in chief and 195 to 209 is plaintiff's rebuttal. Fiona pages 140 to 194 is defendant's evidence and exhibits. Including the plaintiff 36 witnesses testified for the plaintiff. Many of them had worked on the building and others furnished materials. This evidence overwhelmingly shows a substantial compliance with the contract in every particular, and the ordering out of two stories of this building on the facts in this case was an arbitrary ruling by this architect and evidently made to force a rebate in contract price in favor of his employer and paymaster. The evidence for defendant consisted of two brick and mortar experts, two carpenters, Powers (the hired man of defendant), the counsel for defendant, and the three Dowlings, the officers of defendant. Don't forget these walls, second and third stories, built by plaintiff are in the building as afterward completed by defendant.
So viewing this case as one in chancery, I conclude (1) that the evidence clearly shows a breach of contract by defendant and (2) the fraudulent conduct of the architect.
Y. With the breach of the contract upon defendant's part practically all of the things pleaded in its answer fall out of the case. Not only so, but the applicable law is thereby changed. If defendant breached the contract he can claim no payments to subcontractors (under his present pleadings), because even in equity we do not go beyond the pleadings for the issues. If the defendant chose to rest his whole defense upon a contract which both he and his architect deliberately breached, he is not in a very presentable shape for a court of conscience. The trial court allowed him some payments which that court concluded had been made by direction of plaintiff. There was a plea of payment, and under this second clause of the answer, the court was right in charging those items against the plaintiff. This on the theory that payments directed by plaintiff were the same as payments to plaintiff. But this is as far as the court could have gone. When it appears that defendant breached the contract (as it does appear), then all of defendant's answer fails out of the case except the first two short paragraphs thereof, which contain (1) some admissions and a general denial, and (2) a plea of payment. All the remainder of the answer is bottomed upon the contract, which, upon defendant's proven breach, falls clear out of this, an action in quantum meruit.
But it is urged that plaintiff on the proof made would be recovering in excess of his contract. Defendant urges that the plaintiff procured the material and labor at a; less price than the proof shows the reasonable value to be, and therefore should not be entitled to more than he paid out, in this action. To illustrate: Ryan contracted the excavation work at $2600, and then did $100 if extra work. He was paid $2700. He testified that the work he did was reasonably worth $3275, and that he lost $500 to $600 on the job. Other testimony is to like effect. This brings us to what is the measure of recovery in cases of this kind. In Missouri we have two classes of eases in quantum meruit growing out of violated building contracts: (1) cases where the contractor has breached his contract, and the owner has taken over and used the material and labor furnished by the contractor, and (2) where the owner has breached the contract, and the plaintiff has elected to sue in quantum meruit- rather than upon the contract.
There has been some loose writing in the Missouri eases as to the measure of recovery in these two classes of cases, but in Division One I have set out what I now assert to be the true rule in a ease where the owner has breached the contract. In the Division case, Bradley Heating Co. v. Sayman Realty and Investment Go., 201 S. W. 864, l. c. 866, I did not pass upon the question, because not necessarily involved therein, hut I did collate the authorities stating what I deem the rule. In that case I said:
"Thus in McCullough v. Baker et al., 47 Mo. l. c. 402-3, it is saj.d: 'The suit is not founded upon the contract. The plaintiff waives that and sues upon the quantum meruit. If he is entitled to recover at all he is entitled to recover a reasonable compensation for the work actually done. That is the rule where the contractor is prevented from completing his job by the unwarranted acts and defaults of the other party. In such a case he is not restricted to a pro rata share of the contract price. He may either sue upon the contract and claim damages for a breach of it, or he may, as in. this case, waive the contract and sue for Jlie reasonable value of his work.' ~~
"In Ebrlich v. Life Insurance Co., 88 Mo. l. c. 257, Blace:, J., said: 'So a contractor, who has been prevented from completing his job, may waive the action for damages and sue for the value of the work done and materials furnished, and he is not in such case restricted to a pro rata share of the contract price. [McCullough v. Baker, 47 Mo. 401; Mitchell v. Scott et al., 41 Mich. 108; Fitzgerald v. Allen et al., 128 Mass. 234.] '
"With a preciseness characteristic of the man, Rombauer, P. J., in Kelly v. Rowane, 33 Mo. App. l. c. 443, thus summarizes the law:
" 'The law governing the rights of parties to building contracts in this State, although peculiar, is well settled. If a contractor is prevented by the unauthorized act of the owner from completing a building contract, he may recover in an action the reasonable value of his work and labor, regardless of the contract price, and is not restricted to a pro-rata share of th'e contract price. [McCullough v. Baker, 47 Mo. 401; Ahern v. Boyce, 19 Mo. App. 552.] On the other hand, if he voluntarily abandons the contract, he may recover the actual value of the work and ma terials, not exceeding the contract price, less such damages as have resulted to the other contracting party, from the breach of the contract. [Yeats v. Ballentine, 56 Mo. 530; Eyerman v. Mt. Sinai Cemetery Assn., 61 Mo. 489; Davis v. Brown, 67 Mo. 313.] Under th'e issues made by the informal pleadings of the parties, and the evidence adduced in support, the case in its nature was to be governed by one or the other of these propositions. If the plaintiff was prevented by the unauthorized act of the defendant his contract, his rights and extent of recovery were governed by the first class of cases above cited; if he voluntarily .abandoned it, by the latter.'
"This rule is further recognized to the fullest in Eyerman v. Cemetery Assn., 61 Mo. 489; Davis v. Brown, 67 Mo. 313; Car Co. v. Kast, 171 Mo. App. l. c. 311-12; Cann v. Rector, etc., 111 Mo. App. l. c. 182; Dempsey v. Lawson, 76 Mo. App. l. c. 526; Smith v. Coal Co., 36 Mo. App. l. c. 580."
That we have cases which say the plaintiff (con-. tractor) who- has not breached his contract, suing in quantum meru-U an owner who has breached his, contract, • cannot recover in' excess of the contract rate, there is no doubt, but to my mind these cases overlook the real distinction. Where the contractor breached the contract, and then sues for material and labor in quantum), meruit, it is proper to limit his recovéry so as to keep the finished structure within the contract price. This, because his breach of the.contract does not destroy the owner's rights under the contract. By breaching the contract he cannot take from the owner the rights reserved in th'e contract, but the owner in the quantum meruit action can ;a.t least assert the contract to the extent of fixing values and damages. The rule of1 a case where the contractor has breached the contract is well expressed in Eyerman v. Mt. Sinai Cemetery Association, 61 Mo. l. c. 491: "The established rule extracted and deduced from all the cases is, that where a party fails to perform his work according to the stipulations of his agreement, he cannot recover on the special contract; but if the services rendered by him or the materials furnished are valuable to the other party, and are accepted by such party, then he would be liable to pay the actual value of the work performed, or the materials furnished, not exceeding the contract price, after deducting for any damage which had resulted from a breach of the agreement. There may be a recovery upon a quantum, meruit, although the contract has not been complied with, but in such a case the petition must be grounded on a reasonable value, and it must not be declared on the contract."
But in a case where the owner violates or breaches the contract, we universally say the plaintiff can elect to sue in quantum meruit rather than for damages on the contract. If he does so sue, the special contract performs no function in that suit. The defendant cannot undertake to limit the recovery by the terms of the contract, because he has breached the contract. To permit him to use his breached contract to limit a. recovery against him, would be to pay to him a premium for his own wrong. The law does not contemplate' such. The apparent conflict in our cases grow out of an oversight in considering this vital difference between the two classes of quantum meruit actions growing out of breached builders' contracts. To my mind it is not consonant with good reason to hold that an owner who has breached his contract, can yet use that contract to limit the amount of recovery in a quantum meruit action for labor and material which' he appropriated at the time he breached the contract. These loose expressions in our opinions are not sound law.
In the instant case the plaintiff by plain proof showed the reasonable value of the materials and labor furnished. That this value so shown was greater than plaintiff paid, his sub-contractors does not change the situation. Plaintiff was entitled, in this action in quantum meruit, to the benefits of his bargain. He is only required to show the reasonable value, as such is shown in any other action in quantum meruit. He is not precluded by what he pays for the material and labor. [Borden v. Mercer, 163 Mass. l. c. 9, and the cases cited.] Proof of what he paid, is of course admissible, on the question of reasonable value, but is not conclusive thereof.
The findings of the referee and court as to the reasonable value of the materials and labor furnished by plaintiff is sustained by the weight of the evidence, and should be affirmed.
VI. It may be true that defendant after suit was brought did pay some of the sub-contractors, on the theory that he was bound so to do under the contract, or had the right to so do under the contract. But neither this nor the trial court is responsible £°r this situation. Defendant chose to present his case on the theory of a valid subsisting contract, and framed his answer accordingly. "When his theory fell under the proof his contract and all rights thereunder likewise fell. We can't go beyond pleadings, even in equity. Without an unbreached contract upon his part, the defendant had no right to pay the debts of plaintiff. Such voluntary payments cannot affect this ease under the issues made. Defendant made its bed and must lie in it. The conscience of a chancellor is not pricked by the conduct of defendant and its paid servant, the architect. He who seeks equity must do equity.
The judgment should be affirmed. It is so ordered.
Williams, J., concurs; Faris, J., concurs in result; Blair, J., concurs in separate opinion, in which Graves, G. J., and Williams, J., concur; Bond, J., dissents in a separate opinion, in which Walker and Woodson, JJ., concur.