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VOL. I.

APRIL 13, 1878.

No. 3

Legal Notes.

ADMITTED TO PRACTICE.-In the Supreme Court at Sacramento on Tuesday the following gentlemen were admitted to practice: Chas. W. Kitts, A. Burrows, Benjamin Teal, John J. Boyce, Peter Hannan, Vincent Neale, John F. Ellison and W. B. C. Brown, State Controller.

SUPREME COURT Reporter.-By an act of the last Legislature the appointment of Reporter of the decisions of the Supreme Court of this State, was taken from the Judges of the Court and vested in the Governor. Hon. Gideon J. Carpenter, of El Dorado, who represented that county as Assemblyman for two terms, during the last of which, two years since, he filled the responsible position of Speaker, has been selected to fill this important office for four years. The new appointee is an old resident of California, is an able lawyer, and will undoubtedly discharge the arduous duties of his position satisfactorily to all parties.

A GOOD APPOINTMENT.-Governor Irwin has appointed Hon. James D. Thornton of this city to be the Judge of the Twenty-third Judicial District newly created out of the Third and Twelfth Districts. Judge Thornton is a native of the State of Virginia. He became a resident of this city in 1854 and has since that time been practicing his profession here. With no desire to undervalue the claims of the numerous gentlemen who were highly recommended as worthy to inaugur ate this new Court, we but express the general opinion of the profession and people, when we say that a more acceptable appointment could not have been made.

Supreme Court of California.
[January Term, 1878.]

[No. 5057.]

[Filed April 5, 1878.]

COX vs. MCLAUGHLIN.

[Impleaded with the Western Pacific Railroad Company.] CONTRACT-PERFORMANCE OF. Where a variance occurs in the performance of

a specific contract, under an implied promise of reasonable payment for work actually done, and the contract has, so far as performed, been specifically done,--the contract may ordinarily be introduced as evidence of value.

PREVENTION OF.-Unless prevention by defendant be proved and found, plaintiff cannot recover on an unfulfilled contract. A failure to pay an instalment on contract when due, does not constitute prevention, nor authorize the other party to abandon work and recover all the benefit that would result from a full performance.

MOTIVE OF PREVENTION.-Rights of parties under contract not affected by the motive inducing refusal or neglect of payments of stipulated instalments.

STATEMENT OF FACTS.

The defendant and appellant in this case, Charles McLaughlin, the original contractor for building the Western Pacific Railroad from San Jose to Stockton, -entered into a contract with plaintiffs and respondents to construct the twenty-one miles of said road between San Jose and Alameda Canyon. While the work was going on, the Western Pacific sold out to the Central Pacific Railroad Company, who were the owners of the road at the time of the commencement of this action. After several demurrers to the complaint which were sustained,—the case was tried on its merits, resulting in a judgment lien for the plaintiffs of $194,283.80, which was reversed on appeal and the case remanded back for a new trial, on the ground that no action to enforce a lien would lie until the entire contract had been performed. (Cox et al, vs. W. P. R. R. Co,, 44th Cal. Reports, p. 28.) On the new trial defendant's demurrer to plaintiffs' complaint was sustained, followed by a judgment of dismissal, which was sustained on appeal so far as related to the railroad companies, but reversed as to McLaughlin. (47 Cal. Reports, p. 28.) A re-trial resulted in a judgment for plaintiffs rendered June 21, 1875. On the overruling of his motion for a new trial, defendant appeals, setting forth various causes-among others misjoinder of parties plaintiff,—and non-joinder of parties defendant,—averring that Timothy Dame and William J. Lewis were interested with plaintiffs in their contract. Defendant and appellant further claims that owing to fraud and collusion, no action on the contract could be maintained,—and that on the contrary he would be entitled to recover back the money he had already paid. McAllister & Bergin, J. B. Felton and M. G. Cobb, attorneys for plaintiff and respondent.

Campbell, Fox & Campbell, Tully R. Wise and S. M. Wilson for defendant and appellant.

OPINION BY THE COURT.

If after this cause shall have been remitted to the District Court the plaintiff shall ask, and the Court shall permit an amendment of the complaint by the insertion of an averment of the actual work done, it will remain for plaintiffs to prove the actual value.

Where a variance has occurred in the performance of a specific contract, under such circumstances as will enable a plaintiff to maintain an action on the implied promise to pay the reasonable value of the work actually done, and the contract, so far as it has been performed, has been performed in accordance with the specifications therein contained, the contract may ordinarily be introduced as evidence of value.

But whether, when the contract provides for an arbitrary and merely conventional standard of determining what work has been done, an appeal to which does not show what work has in fact been done, the contract is admissable as evidence of the actual value, is not a question, an answer to which is necessary to the determination of this appeal.

When this cause was here on the first appeal, this Court held the contract between McLaughlin and Cox, Myers & Co. to be an entire contract, and said: "It is not alleged in the complaint that the work contracted to be performed has been completed, nor that its performance has been prevented by McLaughlin, or that the contract has been rescinded." (44 Cal., 27.)

After the cause was returned to the District Court, the plaintiffs, adopting the suggestion of the Court, amended their complaint by inserting the averment that defendants had "prevented" the completion of the work. There can be no doubt, as we intimated at the former hearing of this appeal, that the complaint, as amended, is an attempt to declare specially upon the contract, in part-performance and prevention.

The fact that it does not allege damages by reason of loss and profits on the whole job does not change the character of .the pleading, nor of the proof necessary to sustain it. Unless prevention was proved and found, the plaintiffs were not entitled to recover anything on the contract.

The ninth is simply a finding that defendant did not pay plaintiffs their money, as it became due. We have nothing to add to what we have already said in respect to this finding, except that the language, that defendant neglected and refused to pay, "well-knowing that plaintiffs had to rely on the moneys received from him," adds nothing to its effect. Even if, under any circumstances, the failure to pay would authorize

the plaintiffs to cease work and bring suit on the contract (the parties having omitted to insert a provision in the written contract that such failure should constitute prevention), there is no finding that defendant knew at the time the contract was entered into, that plaintiffs relied entirely on his payments to them, or that such reliance was an inducement to the contract on their part. It is manifest that the motive which induced him to refuse or neglect payment cannot affect the rights of the parties under the contract.

There is no finding, in general terms, that defendant "prevented" plaintiffs from performing their contract fully. Nor is there any finding, or evidence tending to prove, that he failed entirely, or prevented, by notifying plaintiffs that he would pay none of the installments as they should become due.

We are, therefore, brought again to the question. In cases like the present, will the mere failure or refusal to pay an installment as it becomes due, authorize the other party to abandon the work, and yet to bring suit for the recovery of all the benefit he would have received had he fully performed; that is to say the contract price up to the time the work ceased, and such profits as he would have made, had he performed his contract in all respects?

An examination of the cases cited by plaintiffs' counsel has not satisfied us that such mere failure to pay has ever been held to be prevention.

In Withers vs. Reynolds, 2 Barn. and Ad. 882, Patterson, J., said: "If the plaintiff had merely failed to pay for any particular load, that of itself, might not have been an excuse to defendant for delivering no more straw; but the plaintiff here expressly refused to pay for the loads as delivered." The case was commented on in Franklin vs. Miller, 4 Ad. and Ell. 599. Coleridge, J., there said: "In Withers vs. Reynolds, each load of straw was to be paid on delivery."

"When the plaintiff said that he would not pay for his loads on delivery, that was a total failure, and defendant was no longer bound to deliver." (See note to Cutter vs. Powell, 2 Smith's Leading Cases,)

In Masterton vs. Mayor of Brooklyn (7 Hill, 64, 65), the plaintiff having continued to furnish marble, as required by his contract, up to a certain date; the defendants suspended operations upon the building, and refused to receive any more materials of the plaintiffs, though the latter were ready and offered to perform.

Canal Company vs. Gordon (6 Wall, 561), construes a statute of California in respect to mechanics' liens, and holds that

where a contract is to complete a structure, with agreements for installment payments, a failure to make a payment at the time specified, justifies an abandonment of the work, and entitles the contractor to receive a reasonable compensation for the work actually done.

In Hale vs. Trout, 35 Cal., 242, there was prevention, or total refusal. Sawyer, J., said: "There was not merely a neglect of payment, but plaintiffs were notified by the defendants that they should treat the contract as at an end, aud would receive no more lumber under it."

Cort vs. Ambergate Railway Company. This case is reported in Langdell's Select Cases on Contracts, 970. Lord Campbell said: "On the whole, we think we are justified on principle, and without trenching on any former decision, in holding that when there is an executory contract for the manufacturing and supply of goods from time to time, to be paid for after delivery, if the purchaser, having accepted and paid for a portion of the goods, gives notice to the vendor not to manufacture any more, as he has no occasion for them, and will not accept or pay for them, the vendor having been desirous and able to complete the contract, he may, without manufacturing and tendering the rest of the goods, maintain an action against the purchaser for breach of the contract."

Jones vs. Barkley (2 Douglass, 684), and Ripley vs. McClure (4 Exchr., 344), simply hold that where an act is covenanted to be performed by each of two parties at the same time, he who is ready and willing to perform may be discharged of performance by the other, and, if so discharged, may maintain his action on the contract.

None of the cases above referred to declare the proposition that failure to pay an installment on a contract of the kind here sued on will authorize an action like the present.

For the reasons mentioned in the former and present opinion, the judgment and order denying new trial are reversed, and the cause remanded for a new trial.

[Wallace, C. J., and Crockett, J., did not participate in this decision.]

[No. 5829.]
[Filed April 10, 1878.]

IN THE MATTER OF THE ESTATE OF T. JEFF. WHITE, DECEASED.

On appeal from Probate Court of Los Angeles county. Katie M. Bachman, Testamentary Executrix and appellant. Virginia R. Green, petitioner and respondent.

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