Court Opinion

ID: 8770812
Source: CourtListenerOpinion
Date Created: 2022-11-26 12:43:24.690482+00
Date Added: 2024-06-11T17:02:12.150140
License: Public Domain

ARCHBALD, District Judge.
I concur in the affirmance of the judgment and the refusal of a reargument, and I agree with what has been said as to the work done under the second or substitute contract affording no evidence of the damage for failure to perform the first one. Not that it might not have done so, perhaps, but that it did not, because of the way that it was sought to make use of it. I would not, however, rest the decision there, but would go further, and hold, with the court below, that there was an abandonment of the first contract, which released the surety; a pronouncement upon this point being called for, in my judgment, in order to meet some things which are urged as ground for a reargument. As is there pointed out, claim was also made at the trial, as an element of damage, for the amount expended for the new issue of bonds, $845, made necessary, as it is charged, by the default on the first contract, as well as for the additional amount, some $600, required to be paid to secure a right of way over the Babcock property, condemnation proceedings having to be resorted to, where it could have been had for nothing, if the condition of the deed which was at first given for it—to begin the road within 6 months and complete it within 12 months—had been complied with. Not only was evidence as to each of these introduced and insisted on over the objection of counsel, but, as it now appears, they were pressed upon the coürt on the motion for a new trial, the same as they are here, as reasons why a verdict should not have been directed, and are not now brought forward for the first time, as assumed in the former opinion. Both of these items, however, are effectually disposed of, if the original contract was in fact abandoned. It may not be accurate to speak of this as an alteration, or to altogether deal with it on that basis, although it may amount to that. The better position is that the second contract was such a departure *547from that for the performance -of which the- defendant was surety that he could not in justice be held for it, and it was so in effect treated by the court below, as is shown by the opinion refusing a new trial, where a comparison between the two is made, and the differences pointed out, which, reference being had to the full discussion which there appears, does not need to be repeated. 158 Fed. 850. It is true that the second contract was not entered into until after there had been a default on the first one, by which the defendant became liable to the extent that the plaintiff was thereby damaged. But the damage was merely nominal at first, and it by no means followed that there would be anything beyond that, which could only be told by the sequel. Nor did the fact that liability had attached prevent the discharge of the surety, as argued, if anything was done to his prejudice after-wards. John A. Tolman Co. v. Hunter, 113 Mo. App. 671, 88 S. W. 636. No doubt the plaintiff could not be expected to rest with the situation, and was entitled to go ahead and get some one to build the road, as it had been projected. And it may be that, in order to do so, some changes were necessary, without which it would have been impossible. But that did not justify a radical variance, amounting to an altogether new and different contract, such as was entered into. The defendant stood sponsor for the performance of the original, and for that only; and, if he was to be held, the substance of it had to be adhered to. And when a new one was entered into, with terms and conditions essentially different, he was no longer liable. Unquestionably he would be released, if the changes were introduced after the contract had been entered upon, and it is no different in principle where they were embodied in a substitute. If the latter expressed what was wanted, or was even compelled by a change in the circumstances, the plaintiff in adopting it must abide the consequences. It is a complete answer, to any attempt to charge the defendant with it, that it was not the one for which he undertook to be responsible. American Bonding Company v. U. S. (C. C. A.) 167 Fed. 910.
It is said, however, that, as the direct result of the default of the contractor, and in no way involved in the change in the contract, the defendant was at least liable for the two items of damage mentioned above—the expense of printing the original issue of bonds, which were made useless, and the extra amount which the plaintiff had to pay for a right of way over the Babcock property—which were disregarded. It appears, with regard to the former, that $1,700 was put in the hands of the contractor, who paid out $855 to have the trust mortgage prepared, and the bonds engraved and printed; the rest of the money—$600 trustee’s fees, and $245 revenue taxes—being appropriated by him to his own purposes. Of course, the defendant, as surety, was in no way liable for the money which was so misappropriated. Neither was he, in my judgment, for the expenditures which were rendered useless by the change in the bond issue. It was not made clear to me at the argument why he should be; nor, upon looking into the matter, am I any better persuaded of it. This expenditure was not lost because of the default of the contractor, apart from the change which was made in the contract, but solely *548because, by the terms of the new contract, the road was lengthened, and its character modified from an exclusively steam road to one of combined steam and electricity, which compelled a rewriting of the mortgage. The defendant being released, as we have seen, from whatever was incident to the change, is relieved from this item along with the others. Had the original contract been adhered to, we should have heard nothing of this matter, and that effectually disposes of it.
Nor does the claim for the extra amount paid for the Babcock right of way stand much differently. No doubt the plaintiff got a deed for this in the beginning without having to pay anything, and had subsequently to condemn the land and pay $600; the condition on which the deed was given, that the road should be completed within 12 months, not having been complied with. But that is not all that is to be said of it. Not only is it a question how far the plaintiff is chargeable with the delay by which the deed was invalidated, but by the further provision of the deed, and as a part consideration for it, the company covenanted to construct a ditch on each side of its track, and to keep open all the drains necessary to relieve the farm traversed, and also to furnish certain wire fencing and posts for the erection of a fence along one side of the right of way. All of this was got rid of when condemnation proceedings were resorted to, which more than offsets, in all probability, the $600 which was paid as the outcome; or, even if the saving was not complete, it was considerable, and, not having been definitely shown, the actual damage is so uncertain and problematical that nothing can be predicated on it.
There is no force to the suggestion that, the contract having been broken, the plaintiff was at least entitled to nominal damages. There might lie something in this if there was a right to establish, or costs were involved, neither of which is the case. That there was a right to maintain, to which the recovery of judgment was material, will not, of course, be pretended. And, the jurisdiction of the court being dependent on the diverse citizenship of the parties, the plaintiff, by the express provision of the statute, in order to get costs, was required to recover a judgment of at least $500. Rev. St. 968 (U. S. Comp. St. 1901, p. 702). As to this the Pennsylvania practice, which is relied on, is not controlling. It is true that nominal damages might save the plaintiff from having to pay the defendant’s costs, except as it was expressly adjudged to do so. McCarthy v. American Thread Co. (C. C.) 143 Fed. 678. But the original contract having been abandoned, and the plaintiff, outside of that, having shown nothing substantial, there is no reason why the defendant should be put to the cost and expense of defending the suit, where the right of the plaintiff to maintain it was merely nominal.
Neither is there anything in the further suggestion that, damages exceeding the penalty of the bond having been shown, it does not matter as to anything above that. This begs the whole question. The method of proof resorted to at the trial was such that nothing reliable could be deduced from it, in the face of which it is by no means to be conceded that damages exceeding the face of the bond were in fact established.
*549While, then, the petition for a rehearing is not without substance, for the reasons given, I see no occasion for disturbing the judgment of affirmance, which has been entered.