Court Opinion

ID: 8808607
Source: CourtListenerOpinion
Date Created: 2022-11-26 14:55:39.945686+00
Date Added: 2024-06-11T17:04:11.787502
License: Public Domain

Additional Opinion on Petition for Rehearing, by Mr. Justice Smith. In its petition for rehearing appellee calls the attention of the court to two points urged in its brief which we failed to discuss in our opinion filed in this case; namely, that the agreement set out in the first count of the declaration as amended is void for want of a consideration; and, second, that the agreement proposed to be proven is within the statute of frauds and void because not in writing. It is urged that these points should be disposed of for the guidance of the trial court, if we adhere to our judgment heretofore entered. In the opinion filed we said: “On the question of the alleged contract we think the tendered proof on behalf of plaintiff tended to show a valid legal contract which was performed by the plaintiff,” etc. This, we thought, disposed of that question, as it could not be a valid contract without a good consideration. The reasons urged by counsel for the defendant that the contract set out is without consideration were, first, that there was an existing contract between the plaintiff and a third person, the Dietzgen Company, for doing the work sought to be recovered for, and, second, that the plaintiff had agreed to indemnify the defendant against all loss and damage arising from the plaintiff’s failure to perform his contract with the Dietzgen Company. We do not regard the contention or the reasons given therefor as sound. There is one fundamental infirmity to both reasons urged. They ignore the fact that after the plaintiff entered into his contract with the Dietzgen Company he made a contract for a part of the work and materials with the Federal Company and the defendant had given its bond to the plaintiff for the faithful performance by the Federal Company of its contract with the plaintiff, and the Federal Company had defaulted in its contract and abandoned the same, and the defendant was liable in damages on its bond to the plaint^ iff for such default, at the time the alleged contract was made. All this had happened after the making of the plaintiff’s contract with the Dietzgen Company and after plaintiff’s agreement to indemnify the defendant against all loss and damage from plaintiff’s failure to perform his contract. Thus the situation of the parties had changed and new rights and liabilities had arisen between the parties. In our opinion the alleged agreement between the plaintiff and the defendant is based on a new and independent consideration, arising out of the rights and liabilities of the parties to it in consequence of the default and abandonment of the contract of April 4, 1906, between the plaintiff and the Federal Company, and the resulting liability of the defendant on its bond given to plaintiff to secure the faithful performance of that contract by the Federal Company. The liability of the defendant upon the bond dated April 26, 1906, signed by it and the Federal Company, had become fixed for the amount of the difference between the cost to the plaintiff to complete the contract of the Federal Company and the amount payable to that company had it fulfilled and completed its agreement of April 4, 1906. In regard to this liability under the facts shown, we think there can be no legal controversy or question. The Federal Company was liable for it under its contract with plaintiff; and the defendant was liable for it under its bond. By the terms of the bond it had the right to be notified in writing of any act on the part of its principal which should involve a loss thereunder, and it was so notified. It also had reserved the right and, privilege to assume the contract of the Federal Company and to sub-let or complete the work covered by the contract as it might elect. Under this provision of the bond it had consented to join with plaintiff or to authorize plaintiff to request bids for the completion of the work. The lowest bid for the work was that of Brown & Bead, which if accepted would have made the cost of completing the contract $4,000 more than the amount which would have been payable under the contract. Plaintiff desired to accept this bid and requested the defendant to consent thereto. But defendant did not want to sub-let the work for obvious reasons, one of which it gave, namely, that if it gave a written consent to the acceptance of the bid of Brown & Bead for the amount of $35,000 it might in some way be construed as a release of its indemnitor. Plaintiff thereupon said that he looked to defendant to see to it that the work was completed. It is clear, we think, that at this point the defendant was obligated to see this work completed or to pay damages if it was not completed. It is likewise clear, we think, that the plaintiff had the legal right, on the refusal of defendant, to go on and complete the work, and hold the defendant for the damages he sustained, which would have been $4,000 if the bid of Brown & Bead had been accepted. In this situation of affairs according to the tendered evidence and the averments of the first count, the defendant requested the plaintiff to complete the contract of the Federal Company giving his time and energy to the work and furnishing the materials and labor necessary therefor and agreeing to pay over any balance that might result or arise in favor of the Federal Company after paying the bills for materials and labor to that company, and agreed to reimburse and pay the plaintiff whatever amount the costs and expenses of completing the contract and the work exceeded on its completion the balance payable under the contract; and in consideration thereof the plaintiff accepted the proposal and agreed to complete the work in accordance with the plans and specifications in the manner proposed by the defendant. This was an advantageous adjustment of the loss as it appeared at that time for the defendant. If the plaintiff had relet the contract to the lowest bidder there would have been a fixed and direct loss of $4,000 to the defendant from which there was no escape except by the agreement shown by the tendered proof. Presumably there was in the lowest bid a contractor’s profit on the work. This the defendant hoped and believed it would save by the adjustment. There was likewise a detriment to plaintiff necessarily involved in the adjustment. He agreed to waive his right under his contract with the Dietzgen Company to sub-let a part or all of the work, which he had exercised when he sub-let the mason, concrete and carpenter parts of the work to the Federal Company, and thus relieve himself of the labor risks and responsibilities of personally performing the work, and to take upon himself personally the labor risks and responsibilities of completing the work, giving his time and energy necessary therefor, and thus saving the contractor’s profits to the defendant. This was for the benefit and advantage of the defendant and, from the standpoint of the parties at that time, constituted a direct and substantial benefit and advantage to the defendant. In other words, it was a direct and substantial consideration moving from the plaintiff to the defendant. Furthermore, there are the express mutual promises of the parties, the agreement of each party to the contract being a consideration for the agreement of the other party. We come now to a consideration of the second point, that the agreement proposed to be proven is within the statute of frauds. In the first place this question is not before us for the fundamental reason that no error is assigned on the record covering the point. It has been repeatedly held that no errors should be considered by the court except such as are assigned on the record. Ditch v. Sennott, 116 Ill. 288. Passing this, however, we find other reasons for not considering the question on this record. The record shows that on March 5, 1908, before the trial was entered upon, the court granted leave to the plaintiff to withdraw the common counts filed by him. The cause was tried, therefore, on the first special count (as amended) of the declaration. No plea of the statute of frauds was pleaded. The question is here sought to be raised, and is argued, on objection to the evidence upon that ground, and upon the motion of defendant to instruct the jury. The question cannot be raised in this manner. The record before us does not present the question, which we are thus specifically by the rehearing petition requested to discuss and pass upon. If there is any thing well settled in this state it is that where the contract is declared on specially, the defense of the statute of frauds must be pleaded. If a party does not set it up as a defense either by demurrer, plea or answer, he is deemed to have waived it. Beard v. Converse, 84 Ill. 512, and cases there cited; Koenig v. Dohm, 209 id. 468; Highley v. Metzger, 187 id. 237; Sanford v. Davis, 181 id. 570; Snow v. Griesheimer, 120 Ill. App. 516; Rozenski v. Dewes Brewery Co., 93 Ill. App. 370. The only exception to this rule is where the declaration consists only of the common counts. Under such a declaration it is competent to rely on that statute as a defense under the general issue without pleading it, by objection to the evidence on that ground, or a motion to strike out evidence stating that ground for the motion, or in some other available form. We have not overlooked the fact shown by the record, though no argument is based on it, that at the close of the trial, after the evidence had been closed, counsel for defendant moved the court for leave to file a plea of the statute of frauds, and subsequently tendered a plea to the court. The court refused to allow the plea to be filed. We think it was within the reasonable discretion of the court to deny the motion at that time, and we find no error in the ruling for that reason; and for the further reason that the agreement set out in the first count was not a promise to answer for the debt of the Federal Company, but a new and independent contract based upon a new and independent consideration moving directly from the plaintiff to the defendant, as we have shown above while discussing the consideration of the contract. For these reasons we did not indulge in obiter dictum on this point in our opinion. The petition for rehearing is denied. Petition denied. Me. Justice Mack : I dissent from the original' opinion herein on the ground that the agent had no authority, actual or apparent, to bind the appellee by the alleged contract.