Hoganson v. Knutson
Hoganson v. Knutson
Opinion of the Court
The allegations of the complaint aver a breach of contract by the subcontractor and consequent damages to the principal contractor, the plaintiff. It is claimed that no cause of action accrued to the plaintiff by such breach ■of the contract by the defendant Knutson, since the agreement with Knutson was that if he defaulted in performance of the ■contract and plaintiff proceeded with the work of construction •as provided in the contract, then “no further payments [should] be made to [Knutson] until the completion of said work, and, upon a final settlement to be then made between 'the parties,” Knutson should only be allowed for what he had •actually furnished under the contract, and, in addition to the stipulated damages, Knutson was to be liable to the plaintiff “for all loss and damage and all increased cost of erecting and ■completing said building” caused by his default. The argument is that this agreement operates to bar all action against Knutson until the construction of the building has been completed by the plaintiff. These stipulations provide what losses caused by Knutson’s default shall be charged to him, and that until completion of the entire structure as provided by plaintiff’s contract he shall not be entitled at the time of and after such default to demand payment of the amounts remaining unpaid for work performed and material furnished by him. Such provisions are common in building contracts •and axe inserted to secure prompt performance of the work
It is, however, averred that .the damages are not provable until the plaintiff has actually completed the work Knutson failed to perform under this contract. We discover no such absolute obstacle to the enforcement of plaintiff’s rights. It may well be that the plaintiff, by having let the contract to-other responsible parties, knew definitely before he brought action how much it would cost him to complete Knutson’s contract, or that he possessed full information as to the actual cost of the uncompleted part of the work and the material required to complete it. Furthermore, should plaintiff fail in his efforts to establish all of the alleged damages caused by Knutson’s default, this would operate to the advantage of Knutson and the surety company, and thus no cause of complaint by them can exist on this ground. We are of opinion that the plaintiff’s right of action for the damages caused him by Knutson’s default accrued immediately upon breach of the contract, that the stipulations in the contract do not bar him from the right to then institute an action to recover his dam
By the Court. — The order appealed from is affirmed.
Reference
- Full Case Name
- Hoganson v. Knutson and another
- Status
- Published
- Syllabus
- Contracts: Breach: When action may be brought. ,'A subcontract for a building required performance within a specified time and provided that if the subcontractor should neglect or refuse to complete his contract the principal contractor might take over the work and proceed to complete it,' and tha,t in such case no further payments should be made to the subcontractor until the completion of the work, and upon the final settlement to be then made he should only be allowed for the actual value of what he had furnished, and in addition to the stipulated damages he should be liable for all loss and damage and all increased cost of erecting and completing the building caused by his default. Held, that upon a breach by the subcontractor the principal contractor’s right of action against him accrued at once, and the contract did not require the action to be postponed until after the completion of the work.