Court Opinion

ID: 9530581
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:01:15.360371+00
Date Added: 2024-06-11T13:28:10.683592
License: Public Domain

Foster, J.
(dissenting)—I dissent from the court’s decision for the following reasons:
Appellant, individually and as secretary of the Pierce County Taxation Bureau, brought suit against the school district to enjoin the payment of an alleged compromise of additional compensation for architectural services, in which action the architect intervened. From a judgment of dismissal, plaintiff Warburton appeals and claims there was no consideration to uphold the agreement of compromise and settlement.
By written contract, respondent Johnston, the architect, agreed to plan the construction of an addition to an elementary school, total cost of which could not exceed the amount available for that purpose, $212,102.45. The lowest bid under Johnston’s plans exceeded the available funds by almost $100,000, for which reason the board directed Johnston to draw plans for a building which could be built with the available funds. This the contract required him to do, and, when the plans were revised, a contract was executed for the construction of the addition at a total cost of $239,223.39. Respondent has been paid as provided in the contract, six per cent of the bid figure.
Respondent claimed additional compensation for “extra services” in revising his original plans. Counsel for the school district advised by written opinion that the district was in no way obligated to pay the architect for the revision. The architect’s attorney argued to the contrary, and, eventually, the prosecuting attorney of Pierce county prepared a compromise and settlement agreement which was executed by the school district and the architect. Thereafter, by written opinion, the prosecuting attorney advised that the architect’s claim was valid.
*755Because appellant did not in words challenge the compromise or the lack of good faith, respondent argues that there is consideration. While it is true that the good faith compromise of a bona fide dispute is sufficient consideration, good faith alone is not. The dispute must be bona fide or the claim at least doubtful. Forbearance to prosecute a groundless claim cannot constitute consideration for a compromise. There must have been some reasonable ground for the controversy and at least a possibility of recovery. Nicholson v. Neary, 77 Wash. 294, 137 Pac. 492; Sanford v. Royal Ins. Co., 11 Wash. 653, 40 Pac. 609.
It was held in Gainsburg v. Garbarsky, 157 Wash. 537, 289 Pac. 1000, that:
“ . . . While it is true that forbearance to prosecute a valid claim may form the consideration for a .promise, yet, . . . ‘. . . the forbearance must pertain to a claim upon which recovery might certainly be had or where recovery is at least doubtful.’ ”
Accord, Johnson v. S. L. Savidge, Inc., 43 Wn. (2d) 273, 260 P. (2d) 1088; Jones v. Reese, 191 Wash. 16, 70 P. (2d) 811.
The same principle is stated in 8 Halsbury’s Laws of England (3rd ed.) 120, § 209:
“Forbearance to sue ... is valuable consideration for a promise, provided that the promisee has reasonable ground for believing that he has a good cause of action. If, however, it does not appear that there was any right which could be enforced either at law or in equity, a mere forbearance to sue does not of itself constitute a valuable consideration.” (Italics mine.)
It is widely recognized that good faith alone is not good consideration if the claim is groundless. Respondent’s claim for additional compensation is for doing that which he was already bound to do. Moreover, he was paid the agreed compensation therefor. The claim is utterly groundless, baseless, and unfounded. No one need buy off such a spurious action. The compromise of such a claim is without consideration. Murphy v. Henry, 311 Ky. 799, 225 S. W. (2d) 662; Lauderdale County Cooperative v. Lansdell, 263 Ala. 557, 83 So. (2d) 201; Nybladh v. Peoples State Bank of War*756ren, 247 Minn. 88, 76 N. W. (2d) 492; Hulen v. Truitt, 188 Okla. 296, 108 P. (2d) 170; Davis v. Lilly, 96 W. Va. 144, 122 S. E. 444; State ex rel. Williams v. Pratt, 148 Kan. 885, 85 P. (2d) 10; Pederson v. Portland, 144 Ore. 437, 24 P. (2d) 1031; 25 Minn. L. Rev. 795; 46 W. Va. L. Q. 342; Annotation, 20 A. L. R. 1326; 1 Corbin on Contracts 433, 436, § 140; 12 Cal. Jur. (2d) 231, § 35; 17 C. J. S. 461, § 104(b).
The law favors voluntary settlements of controversies, Opitz v. Hayden, 17 Wn. (2d) 347, 135 P. (2d) 819; and such compromises will be sustained even though subsequent litigation may show that the rights of the parties were different from what they had supposed. Opitz v. Hayden, supra; Jones v. Reese, supra; Hutchinson v. Mt. Vernon Water & Power Co., 49 Wash. 469, 95 Pac. 1023. Therefore, a court will not ordinarily inquire into the dispute upon which the compromise is based except to see that there was some reasonable basis therefor. The court will stop at that point, but the architect’s claim must be examined, for the fact that settlements are favored does not dispense with the necessity of consideration. Warner v. Warner, 124 Conn. 625, 1 A. (2d) 911, 118 A. L. R. 1348.
The contract is clear and without ambiguity. The compensation is fixed. Extra services entail extra compensation, but the contract defines extra services as acts beyond those called for in the contract.
Conforming the plans to the cost limit set forth ($212,-102.45) was required by the contract. That is explicitly and indisputably set out in Article XVI of the contract.2 The architect’s original plans did not, and such was the sole pur*757pose for the revision. Such is the architect’s claim for “extra services” under Article VII of the contract.3
If there were a reasonable dispute as to whether the revision constituted extra services or was merely the performance of the architect’s prior obligation under the original contract, then the compromise agreement should be sustained.
The question is whether such a dispute is reasonable or not. The contract is abundantly clear that the architect’s plans must be within the cost limit. They were not.
The revision of the plans had no other purpose. The school district requested only that the architect perform his contractual obligation. The revision could not be looked upon as extra services outside the contract.
This court has held in a number of cases that the failure of an architect to come within the cost limit set out in his contract of employment was nonperformance on his part, and he could not enforce compensation either under the contract or on a quantum meruit theory for the value of services rendered. Graham v. Bell-Irving, 46 Wash. 607, 91 Pac. 8; Svarz v. Dunlap, 134 Wash. 555, 235 Pac. 801. Accord, Rowell v. Crow, 93 Cal. App. (2d) 500, 209 P. (2d) 149; Parrish v. Tahtaras, 7 Utah (2d) 87, 318 P. (2d) 642; Zannoth v. Booth Radio Stations, 333 Mich. 233, 52 N. W. (2d) 678; Annotation, 127 A. L. R. 410; 6 C. J. S. 307, 310, § 14.
If there were any question that the revision to conform to the contract terms was an extra service, or that the per*758formance of an already existing obligation was an extra service, the compromise agreement would be valid. But there is and can be no such question.
It is settled law that performance of an existing obligation constitutes no consideration for a promise or compensation over and above the original agreement. Snyder v. Roberts, 45 Wn. (2d) 865, 278 P. (2d) 348, 52 A. L. R. (2d) 631; Harris v. Morgensen, 31 Wn. (2d) 228, 196 P. (2d) 317; Keane v. Fidelity Sav. & Loan Ass’n, 173 Wash. 199, 22 P. (2d) 59. There is no doubt that this same principle applies to building and construction contracts. Queen City Constr. Co. v. Seattle, 3 Wn. (2d) 6, 99 P. (2d) 407.
Any claim based upon such a performance is completely groundless. It could not, in any sense, be called “doubtful,” and a compromise agreement to settle such a claim is unenforceable. Forbearance to prosecute a groundless claim does not constitute consideration for a compromise and settlement.
The architect claims that conditions arose, as a result of a steel strike, which made performance of his contractual obligation more difficult than was originally contemplated, and that his performance of the obligation upholds a new consideration.
Such is an erroneous view of the law, for this court in Maryland Cas. Co. v. Seattle, 9 Wn. (2d) 666, 116 P. (2d) 280, quoted with approval from an opinion by Mr. Justice Brandéis in United States v. Spearin, 248 U. S. 132, 63 L. Ed. 166, 39 S. Ct. 59:
“ . . . Where one agrees to do, for a fixed sum, a thing possible to be performed, he will not be excused or become entitled to additional compensation, because unforeseen difficulties are encountered.” (Italics mine.)
The same principle was followed in Westland Constr. Co. v. Chris Berg, Inc., 35 Wn. (2d) 824, 215 P. (2d) 683; Harms, Inc. v. Meade, 186 Wash. 287, 57 P. (2d) 1052; White v. Mitchell, 123 Wash. 630, 213 Pac. 10; Brown v. Ehlinger, 90 Wash. 585, 156 Pac. 544. See, also, Clas v. State, 196 Wis. 430, 220 N. W. 185; 2 Restatement, Contracts, 882, § 467.
Because there was no consideration for it, the attempted *759compromise was invalid. The school district is not authorized to give away public funds. No public official is. The controlling rule of law was laid down in Farnsworth v. Town of Wilbur, 49 Wash. 416, 95 Pac. 642. We there held:
“ . . . It is true the council has the exclusive management of the fiscal affairs of the town, and must be accorded a somewhat wide discretion as to the manner in which it will conduct such affairs, yet we think this power does not enable them to give up to third persons the actual property of the town. No doubt the town council may legally compromise doubtful or disputed claims where they act in good faith and with ordinary discretion, but they cannot under the guise of a compromise surrender up valuable rights or claims over which there is no longer room for a substantial controversy. Such an attempt is a gift rather than a settlement of a doubtful or disputed claim, and gifts to private individuals are beyond the powers of the town.”
The same conclusion was stated recently (1958) in Edelstein v. City of Asbury Park, 51 N. J. Super. 368, 143 A. (2d) 860, in the following words:
“. . . We also recognize the fundamental principle that a municipal corporation may, generally speaking, deal with its contracts and adjust and settle claims against it in the same manner as a natural person, provided it acts lawfully and in good faith, but it cannot make a gift of public monies nor grant releases from obligations under the guise of compromising an entirely unfounded claim against it.
I would reverse the judgment and enjoin the gift of public funds.
Weaver, C. J., Hill, and Finley, JJ., concur with Foster, J.
May 4,1960. Petition for rehearing denied.

“It is hereby understood that the Owner has available for the construction or modification of said building, including incidental site development, the sum of $180,000.00, and it is agreed by the Architect and the Owner that in the event the estimate of costs and/or bids for construction of said building or modification shall exceed such sum or shall exceed the maximum per square foot cost allowable for the designed type of building by the State Department of Education, the Architect shall revise such plans and specifications, with the approval of the Owner, until the estimated cost and/or minimum responsible bidder’s bid will come within such sums.” Article XVI.

“If, after a definite scheme for the building has been approved, the Owner makes a decision which, for its proper execution, involves extra services and expenses for changes in or additions to the drawings, specifications and other documents, or if the Architect is put to labor and expense by delays caused by the Owner or Contractors, or by the delinquency or insolvency of the Contractor, or as a result of damages to the building by fire, he shall be equitably paid for such extra services and expense, the amount of which shall be determined prior to the rendition thereof.
“Should the execution of any work designated or specified by the Architect, or any part of such work, be abandoned or suspended, the Architect is to be paid in accordance with or in proportion to the terms of Article VIII for the services rendered on account of it, up to the time of such abandonment or suspension.” Article VII.