Court Opinion

ID: 6736767
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:19:04.423074+00
Date Added: 2024-06-11T16:01:48.671969
License: Public Domain

Bruce, J.
(after stating the facts as above). Although there are many assignments of error in this case, they nearly all revolve around one question of damages, and a determination of that question is conclusive of most of them. The question of damages is presented by the defendant, and appellant’s exception to the instruction of the court which peremptorily told the jury that the damages to be found by them if they found the issues for the plaintiff must be the sum of $1,392.49 and interest at 7 per cent per annum from January 1, 1909. This instruction was evidently based upon the assumption that the plaintiff was entitled to recover the difference between the 13-J cents which by the subcontract he had agreed to pay the subcontractor, Gentry, and the 17 cents which he was entitled to recover from the drainage board under the principal contract; and added to this, the court evidently allowed him to recover the sum of 35 cents per cubic yard for the estimated cost of the completion of the work, or 18 cents per cubic yard, the difference between the 17 cents provided for in the principal contract and the 35 cents per cubic yard which the witness, Baker, testified would be the cost of completing the work. The defendant insists that, on account of the fact that Long did not enter and complete the work, he is entitled to no damages for the cost of completion. He also insists, in the alternative, that even if the court should find that a personal entry and completion was not necessary to a recovery, the plaintiff cannot recover damages based on an assumed cost of completion which might be charged up to him by his principals, the drainage board, when it was within his power to positively prove the cost of such completion. He insists that plaintiff’s damages should, at any rate, be confined to the loss of the profits on the principal contract, i. e., to the difference between the amount agreed to be paid to him by the drainage board and the amount he agreed to pay to his subcontractor, and that against this sum may be set off the 20 per cent on the 59,840 yards, at 13-| cents per yard, removed by Gentry before the default, and which sum Long was entitled to withhold under the subcontract with Gentry until the completion of the work, and which the terms of *499the bond required to be applied to the reduction of damages against the surety.
The rule is well established that where an obligator, under a collateral or subcontract, fails to perform his agreement within the stipulated time, knowing at the time that the obligee, depending upon such performance, must carry out his agreement with a third person within a certain time or be liable in damages therefor, and there is proof in the record that such obligee has been compelled to pay or account for such damages, such obligor will be liable to the obligee for the damages occurring through his default, as well as for the loss of the profits of the transaction. Such damages are deemed to have been within the contemplation of the parties. Shurter v. Butler, 43 Tex. Civ. App. 353, 93 S. W. 1084; Halstead Lumber Co. v. Sutton, 46 Kan. 192, 26 Pac. 444; Feland v. Berry, 130 Ky. 328, 113 S. W. 425; Sutton v. Wanamaker, 95 N. Y. Supp. 525; Illinois C. R. Co. v. Southern Seating & Cabinet Co. 104 Tenn. 568, 50 L.R.A. 729, 78 Am. St. Rep. 933, 58 S. W. 303; O. H. Perry Tie & Lumber Co. v. Reynolds, 100 Va. 264, 40 S. E. 919; Ledgerwood v. Bushnell, 128 Ill. App. 555; Murdock v. Jones, 3 App. Div. 221, 38 N. Y. Supp. 461; Modern Steel Structural Co. v. English Constr. Co. 129 Wis. 31, 108 N. W. 70. We are unable to find any authorities, however, and our attention has been called to none, which permit the recovery of damages based upon the cost of completion, where the obligeé has not been compelled to pay the same, or actually incurred any liability therefor, and when the question as to whether he will incur them or not is a matter which is entirely problematical. Much less have we been able to find authorities which allow their recovery when the cost of completion is merely estimated and there is a positive and definite method of ascertaining their amount, which has not been taken advantage of. What the law aims at is to extend a fair measure of compensation for wrong sustained. What it desires is certainty, and what it most abhors is speculation and oppression. To allow the plaintiff to recover against the defendant for the 3¿ cents’ loss of profits on the principal contract, and in addition thereto for the 35 cents a yard estimated cost of completion, when he did not complete, and, as far as the evidence shows, was not required to complete by his principal, the drainage board, and when the drainage board itself completed the work, and there is no *500evidence whatever that the cost to it of such completion exceeded the 17 cents per cubic yard agreed to be paid to the plaintiff under the principal contract, would be to open the door to speculation and in many cases allow a plaintiff to recover a greater profit on the breach of a subcontract than he would have recovered if his subcontractor had performed the same. This the law will not, and should not, tolerate. American Surety Co. v. Woods, 45 C. C. A. 282, 105 Fed. 741; Hunt v. Oregon P. R. Co. 1 L.R.A. 842, 36 Fed. 481.
It is true that the witness Baker testified that the cost to complete the ditch would have been 35 cents a cubic yard. This, however, was merely an estimate, and as the ditch was completed in the summer of 1909, and several months before the trial, there was a positive means of arriving at the cost. There, too, was no proof of any claim or demand of damages on the part of the drainage board, or that the cost of completion by them exceeded the cost of the original contract price. It is true that the bond required the action to be commenced by February 1, 1909 and that, although there is a serious question as to the validity of this provision, there is also a serious question as to whether the bond company could assert its invalidity. The case, however, did not come up for trial until January 1, 1910, and on the trial at least two of the drainage commissioners were present as witnesses, as well as the secretary of the board. The plaintiff could easily have proved, upon the trial, this question of the cost of completion. Instead of doing so, he relies upon speculative estimates. This is not a definite way of proving damages, and such as the law approves. The provisions in the contracts, also, that if the obligor in the contracts did not proceed with the work with reasonable diligence, the obligees might enter and complete the same, “holding the said obligors liable for all costs and expenses in finishing said ditch, over and above the amount of the contract price,” were evidence, and in many courts have been held to be conclusive evidence, of an understanding that entry and completion by someone and at some time was a prerequisite to a recovery of damages, and was the agreed basis of the estimate thereof. Ibid.
The measure of damages under the evidence in the case at bar should have been the loss of the profits of the transaction, or the difference between the price per yard agreed to be paid by the board to the principal contractor, Long, and the price agreed to be paid by Long to the *501subcontractor, Gentry, and against this the defendant was entitled to an offset of 20 per cent on the yardage removed by Gentry, at 13-J cents a yard, which the bond required should be reserved for the protection of the surety. This credit largely exceeds the loss sustained by the plaintiff, even if we estimate his damages at 3% cents a yard profit, as provided for under the principal contract, or at 2 cents a yard as contended for by the defendant. ■ We are of the opinion that the court erred not only in instructing the jury upon the question of damages, but also in denying the motion for a directed verdict, and in denying the motion for a judgment non obstante veredicto.
This view of the case makes it unnecessary for us to consider the other errors assigned by the appellant. The judgment of the district court is reversed and the case is remanded with directions to said court to enter judgment in favor of ’the defendant and against the plaintiff.