Cox v. McLaughlin

Counsel

S. M. Wilson , and Tully R. Wise , for Appellant. This case has been before the court on several different appeals. The decisions on the former appeals are to be found as follows: Cox v. Western Pacific R. R. Co. 44 Cal. 18 ; S. C. 47 Cal. 87 ; Cox v. McLaughlin , 52 Cal. 590 ; S. C. 54 Cal. 605 . On these appeals the whole law of the case arising on the present appeal has been settled. "A previous ruling by the appellate court upon a point distinctly made may be only authority in other cases, to be followed or affirmed, or to be modified or overruled according to its intrinsic merits, but in the case in which it is made it is more than authority; it is a final adjudication, from the consequences of which the court cannot depart, nor the parties relieve themselves." ( Phelan v. San Francisco , 20 Cal. 45 ; Davidson v. Dallas , 15 Cal. 75 ; Haynes v. Meeks , 20 Cal. 311 ; Mulford v. Estudillo , 32 Cal. 136 ; Donner v. Palmer , 51 Cal. 629 ; Jaffe v. Skae , 48 Cal. 543 ; Meeks v. S. P. R. R. Co. 56 Cal. 517 ; Wittenbrock v. Bellmer , 62 Cal. 558 .) These previous rulings on the former appeals not only were binding on the court below, but are binding also upon the apellate court, and apply as well to the construction of the pleadings as to other questions. ( Lucas v. City of San Francisco , 28 Cal. 594 .) The series of complaints in this record from first to last all count upon the same special contract in writing according to its alleged legal effect. On the first appeal it was held that the contract between McLaughlin and Cox, Myers Co. was "an entire contract," and that the provision for payments from time to time on the estimates" does not change the character of the contract in this respect and make it severable." It was also held that the complaint was bad because it did not allege that the work had been completed, nor that its completion had been prevented by McLaughlin, nor that the contract had been rescinded. On the second appeal, after the complaint had been amended by inserting therein an allegation that McLaughlin prevented the completion of the work, the court held that the complaint was sufficient, but reaffirmed its former decision that the contract was an "entire contract," and not severable. On the third appeal the court again held that the contract was "an entire contract," and that "assuming the failure to pay as alleged constituted a breach of the contract, the plaintiffs could have treated the specific contract as rescinded, and have brought suit on the implied promise of defendant to pay the value of the work actually done." But the court looking at "the whole frame of the complaint," held that the action was not on an implied promise arising upon a rescission of the special contract, but was based upon a breach of the express contract resulting from the alleged prevention. The present complaint, in all the particulars above referred to, is exactly like the complaint before the court on the last preceding appeal. The special contract counted upon is the same, and the same allegation is made as to the completion of the work having been prevented by the defendant. We have it then as the settled law of the case now no longer open to discussion. 1. That the action is not indebitatus assumpsit upon an implied promise arising on a rescission of the contract. 2. That the action is based upon the contract, part performance and prevention being alleged as the cause of action. The answer here is the same as upon the preceding appeal, and denies as well the averment of prevention as the contract sued on, and avers that the contract actually made by the parties was a different contract from that described in the complaint, and annexes copies, which are made part of the answer. Thus it appears that the issues now are the same as upon the last appeal, and it was decided on that appeal that prevention was a vital issue, and the judgment there was reversed because there was no finding of prevention. ( 52 Cal. 590 ; 54 Cal. 605 .) On the present appeal, therefore, the judgment below cannot be affirmed here, unless the court can see in the record (1) a finding of prevention; (2) evidence sufficient to sustain such finding. What is prevention? Nothing more or less than what the word in its ordinary meaning signifies.If McLaughlin did any act, or omitted to do any act, notwithstanding which Cox Co. could legally proceed to fulfil their contract, they were not prevented. No such act was done, nor was anything omitted. At all times Cox Co. had the legal right to go on, and McLaughlin protested against their abandonment of the contract A party to a contract has the legal power to stop the work under it, but thereby becomes liable to pay to the other party such damages as the latter may suffer by such prevention. If A. agrees to build a house for B. with lumber to be furnished by B., and the latter fails to supply the lumber, he prevents A. from performing, and becomes liable. In neither of these events can A. proceed. But if A. is to build for B., and furnish as well the material as the labor, upon payments from time to time to be made by B., the failure of the latter to pay is not prevention, for, notwithstanding such non-payment A. may still go on. This, too, was settled on the last appeal, where it was held "that the mere failure to pay the money due upon the contract before the completion of the work did not constitute such `prevention' as justified a recovery in the present action." This court adopts also, and fully concurs in the opinion of the Supreme Court of Illinois in Palm v. The Ohio Miss. R. R. Co. 18 Ill. 219 , and makes a long extract from, the opinion in that case, delivered by Mr. Justice Caton. This, by adoption, becomes the language of this court. That extract says: "It is undoubtedly true that the failure to make such payments may, in point of fact, leave the other party without the mean, or credit to go on and complete the job; but such is not the necessary result of such a failure, and we cannot safely adopt it as a conclusion of law that it does prevent the party from going on. The prompt payment of such instalments might be indispensable to enable a party of small means and credit to go on, while another of larger means and more extended credit might be able to complete the contract without embarrassment or sacrifice. Can we inquire into the actual fact, and see whether the non-payment did really stop the plaintiff or not, and thus administer one measure of law to the poor man, and another to the rich ?" The court then demonstrates that no such inquiry could be made. But the court below, against the objection of the defendant, allowed the plaintiff to introduce evidence as to the pecuniary condition of Cox, Myers Co. when the contract was made, and the knowledge of the defendant on the subject, for the purpose of showing that the parties contracted with the understanding that a failure in the payments would put an end to the work. This evidence was admitted on the theory of interpretation, but its object was to add to the terms of the contract by construing into it a provision making the payment of the instalments a condition precedent to the further prosecution of the work. It is clear that such evidence was inadmissible. A contract may be read by the light of surrounding circumstances, but the strongest light does not enable the court to make a new contract for the parties. All previous and contemporaneous understandings are merged in the contract as written, and it cannot be contradicted, altered, added to, or varied by parol evidence. ( London Tramway Company , appellants, v. Bailey , respondents, 28 Eng. 199, and notes; S. C. 3. Q. B. Div. 217; The Tharsis Sulphur and Copper Co. , appellants, v. McElroy Sons and others , respondents, 3 Appeal Cases, 1040; S. C. 24 Eng. 638, and notes; Bristow v. Catlett , 92 Ill. 17 ; Andrus v. Mann , 92 Ill. 40 ; Driver v. Ford , 90 Ill. 595 ; Leopold v. Salkey , 89 Ill. 412 ; Wood v. Surrells , 89 Ill. 107 ; Schroer v. Wessell , 89 Ill. 115 ; Lucas v. Beebe , 88 Ill. 427 ; Knowlton Co. v. Cook , 70 Me. 143 ; Stevens v. Haskell , 70 Me. 202 ; Whitmore v. Learned , 70 Me. 277 ; Witzler v. Collins , 70 Me. 290 ; McGovern v. . Heissenbuttel , 8 Ben. 46; Blackman v. Dowling , 63 Ala. 304 ; Glover v. McGilvray , 63 Ala. 508 ; Crouch v. . Woodruff , 63 Ala. 466 ; Fore v. Hibbard , 63 Ala. 410 ; Copeland v. Cunningham , 63 Ala. 394 ; Larzear v. National Union Bank of Md. 52 Md. 119 ; Smith v. Flanders , 129 Mass. 323 ; Way v. Batchelder , 129 Mass. 361 ; Trager v. Louisiana etc. 31 La. An. 235; Perry v. Burton , 31 La. An. 262; Heffield v. Meadows , L. R. 4 C. P. 596; Evans v. Pratt , 3 Mann. G. 759; Smith v. Wilson , 3 Barn. Adol. 728; Shore v. Wilson , 9 Clark F. 555; Broughton v. Mitchell , 64 Ala. 210 ; Straus v. Meertiff , 64 Ala. 299 ; Whart. on Ev. vol. 2, §§ 940, 941, and notes; Estate of Garraud , 35 Cal. 340 ; Young American Engine Co. v. Sacramento , 47 Cal. 594 ; Hendrick v. Crowley , 31 Cal. 476 ; Lennard v. Vischer , 2 Cal. 37 ; Adler v. Friedman , 16 Cal. 138 ; Osborne v. Hendrickson, 1 Cal. 286; S. C. 8 Cal. 33 ; Pierce v. Robinson , 13 Cal. 126 ; Smith v. Moynihan , 44 Cal. 64 ; Hill v. Shields , 31 Am. Rep. 499; Taylor v. French , 31 Am. Rep. 609; Hypes v. Griffin , 31 Am. Rep. 71; Martin's Exec. v. Lewis' Exec. 32 Am.Rep. 682.) In regard to the supposed prevention arising from the total suspension of the work by McLaughlin, it was held on the last appeal, in view of the terms of the contract, that he was authorized to suspend the work, and therefore suspension was not prevention. But the court finds that the work was suspended immediately after the execution of the supplemental contract on the 2d of October, 1865, and it is also found that the work was continued up to the 15th of September, 1866. There is, however, no truth in the finding as to the suspension of the work. It is directly in the face of the evidence. The learned counsel further argued that as the payments were to be made upon estimates of the engineer, and there was no allegation or proof in relation to such estimates, the plaintiff could not recover, citing Holmes v. Richet , 56 Cal. 307 ; Vanderwerker v. Snyden , 27 Vt. 130 ; Herrick v. Belknap , 27 Vt. 673 ; Wilson v. N. Y. Md. Line Railroad Co. 11 Gill. J. 58; Kidwell v. Baltimore Ohio Railroad Co. 11 Gratt. 676; Morgan v. Birnie , Langdell's Select Cases on Contracts, 508; Clarke v. Watson , Langdell's Select Cases on Contracts, 598; McMahon v. New York Erie R. R. Co. 20 N Y. 463 . They also contended that the contract stated in the complaint was essentially different from the contract between the parties as set up in the answer and shown by the evidence and findings of the court, and that the plaintiff could not sue on one contract, and recover upon another, citing Washington etc. Steam Packet Co. v. Sickles , 10 How. 419; H art v. Rose , Hemp. 238; `People v. Jackson , 24 Cal. 632 ; Rogers v. Cody , 8 Cal. 324 ; Gil more v. Lycoming Fire Ins. Co. 55 Cal. 124 . S. W. Sanderson , and Fox Kellogg , also for Appellant. argued the same questions in part, and others not passed upon by the court. McAllister Bergin, J. P. Hoge , and M. G. Cobb , for Respondent. 1. A previous decision of the appellate tribunal establishes the law of the case, but it does not make the facts of the case; or, as expressed by this court, "facts are not settled by judicial precedents, but only questions of law." ( Swift v. Kramer , 13 Cal. 531 ; or, as stated in Nieto v. Carpenter , 21 Cal. 488 .) "We admit that a previous ruling of the appellate court upon a point directly made is as to all subsequent proceedings a final adjudication, from the consequences of which the court cannot depart, nor the parties relieve themselves." ( Phelan v. San Francisco , 20 Cal. 39 .) But such ruling, if relating to a matter of fact, can only be invoked when the fact re-appears under the same circumstances in which it was originally presented." ( U. S. v. Arredondo , 6 Peters, 736-741.) 2. Parol evidence of all the facts and circumstances surrounding the parties is admissible for the purpose of enabling the court to correctly construe the terms of the contract. ( U. S. v. Peck , 12 Otto, 65; Saunders v. Clark , 29 Cal. 304 .) 3. Subtraction or withholding from the contractors the means of enabling them to perform their contract may constitute prevention. ( U. S. v. Peck , 12 Otto, 65; School Dist. v. Hayne , 46 Wis. 513 ; Phillips v. Seymour , 1 Otto, 649; Canal Co. v. Gordon , 6 Wall. 569; Bean v. Miller , 69 Mo. 393 ; Jones v. Mial , 82 N C. 252 ; Dobbins v. Higgins , 78 Ill. 440 ; Lincoln v. Schwartz , 70 Ill. 134 ; Oates v. Kendall , 67 N. C. 241; Kingsley v. City of Brooklyn , 78 N. Y. 216 ; Freeth v. Burr , Law Rep. 9 C. P. 213; Schulte v. Hennessy , 41 Iowa, 356 ; Grand Rapids and Bay City R. R. Co. v. Van Duzen , 29 Mich. 444 ; Howard v. Wilmington and Susquehanna R. R. Co. 1 Gill, 322-343; Graves v. Donelson , 24 Conn. 635 ; Central Military Park R. R. Co. v. Spurck , 24 Ill. 588 ; Schwartz v. Saunders , 46 Ill. 23 ; Court v. Ambergate , 6 E. L. E. 230; Hochester v. De La Tour , 20 E. L. E. 160; Thompson v. Lane , 8 Bosw. 485; Lamoroux v. Rolfe , 36 N. H. 36 ; Shaw v. Grandy , 5 Jones (N C.) 57.) 4. The evidence as to the pecuniary condition of Cox, Myers Co. was clearly admissible on the question of prevention. It tended to show that McLaughlin, by failing to pay the instalments, knowing that such failure would compel an abandonment of the work, not only violated his obligations under the contract, but prevented its completion. True, mere non-payment in and of itself, as announced by this court, and we hope simply for the purposes of this contract, does not constitute prevention. Yet, most assuredly, in connection with other circumstances, it has a bearing, and is relevant as evidence upon the question as to whether or not McLaughlin did prevent performance of the contract; and does not the pecuniary condition of the parties have a like bearing? The case of The United States v. Peck is strongly in point. 5. Only since July 1, 1874, has it been the statute law of this State that "no variance between the allegation in a pleading and the proof is to be deemed material unless it has actually misled the adverse party to his prejudice in maintaining his action or defense upon the merits." (Code Civ. Proc. § 469 .) How a party can be misled by the adverse party claiming relief upon the contract he himself sets up as the true one, is not readily apparent. Especially is this the case when the litigation for years has been between the same parties upon the same contract. Parties cannot thus play fast and loose. The law will not sanction it. Upon the former appeal appellant procured reversal of judgment in favor of respondent upon the ground that the contract set up in the answer was the true contract determinative of the rights of the parties, and that according to the same, respondent was not entitled to retain the judgment, recovered, and this court so adjudged and ordered a new trial to determine the rights of the parties under the contract. Upon this retrial counsel say this is not the contract in controversy at all. They are estopped from so claiming. ( Philadelphia Wilmington R. R. v. Howard , 13 How. 336; Lilley v. Adams , 108 Mass. 52 ; Hooker v. Hubbard , 102 Mass. 241 . Such practice is simply trifling with the administration of justice.