Bruns v. Light, 9280

• Decision Date: 16 June 1952
• Docket Number: No. 9280,9280
• Parties: BRUNS et al. v. LIGHT et al.
• Court: South Dakota Supreme Court

Page 99

54 N.W.2d 99

74 S.D. 418

BRUNS et al. v. LIGHT et al.

No. 9280.

Supreme Court of South Dakota.

June 16, 1952.

Dana & Maron, Cherry, Braithwaite & Cadwell, Sioux Falls, for appellants.

C. C. Caldwell, Sioux Falls, for respondents.

LEEDOM, Judge.

Respondents, building contractors, brought this action to recover a balance claimed to be owing on an oral agreement for the construction of appellants' dwelling. As a part of their original cause of action, respondents sought to have a 'Lien Waiver' reformed to eliminate therefrom language reciting that respondents had received payment in full for all labor and materials furnished in the construction. In an amended complaint the claim for the balance owing and the claim for reformation of the instrument were stated in separate causes of action. Appellants denied owing any sum whatsoever on the contract, pleaded the 'Lien Waiver' as a full release of liability and counterclaimed for $5,000 on account of alleged defects in the construction. The equitable action for reformation and the law action for breach of contract were tried simultaneously to the court, and to the jury, respectively, on the same evidence. The court found that the 'full payment' provisions of the 'Lien Waiver' had been included without intention to discharge the liability on obligations not actually paid; and the jury returned a general verdict in favor of respondents for $4,000 plus interest, somewhat less than the full amount claimed, apparently making a small allowance on appellants' counterclaim. We affirm the judgment entered on the verdict.

Respondents brought the action on the theory that they had entered into an oral contract with appellants to build the latter a home for cost of all necessary labor and materials plus 10% thereof, with the 10% item fixed at a maximum equal to 10% of the estimate of total cost of labor and materials furnished appellants by respondents prior to the beginning of construction. Appellants took the position that originally there had been a definite oral agreement that the dwelling would be constructed at a cost equal to the figure respondents claim to be only an estimate, that the actual cost on the date the 'Lien Waiver' was given exceeded this original agreed cost and that appellants had agreed to pay the increased cost on that date and made final settlement, demanding and receiving as a condition precedent to payment the lien waiver which constituted a full release.

The real problem in the case involves the instrument variously referred to in the record as 'receipt' and 'release' and which was actually entitled 'Lien Waiver'. It was admittedly prepared by Wm. B. Bruns of respondents who was in charge of the work, on one of a supply of forms kept by respondents, and was duly signed and delivered by him to appellants at the latter's request. The instrument is as follows:

'Lien Waiver

'Nov. 3, 1948

'The undersigned acknowledges receipt from

Mr. & Mrs. Richard Light payment in full for all labor and materials By The Undersigned Delivered Or Furnished To (or performed at) a residence and garage at 2125 W 20th St. Sioux Falls S. D. and for value received waives all rights acquired by the undersigned to file mechanics' liens against said premises.

Bruns Const Co

W B Bruns'

(Parts italicized were written in longhand and the balance was the mimeographed form.)

Evidence was taken by the court as to the circumstances under which this instrument was executed and delivered. Testimony on this point given by Richard M. Light of appellants, and Mr. Bruns is sharply in dispute. Light testified in substance that when he was asked for an additional $5,000 payment on the contract price, after the house was substantially completed, he declined to make the payment except upon delivery to him of a final release from all further liability; that he believed the payments previously made by him as construction had progressed approximately equaled bills currently incurred and that the final $5,000 payment made when he obtained the lien waiver, bringing the total payments in excess of the price originally agreed upon as he claimed, equaled approximately the total of all outstanding bills and that such payment was accepted in final settlement thereof by respondents. No testimony was offered to show the substance of a dispute over the amount owing at this time nor of actual conversation resulting in the claimed settlement.

Bruns testified in substance that when he asked Light for the $5,000 payment Light advised him that in connection with the completion of the FHA loan on the dwelling it would be necessary for Light to have a statement indicating that Bruns waived the right to file a lien on the property and that Light would not make the payment without such a waiver, that Bruns was agreeable to give such an instrument and did give the 'Lien Waiver' with a 'gentlemen's' agreement on the side that he would wait until after the first of the year for the balance owing, the exact amount thereof being then unknown to him inasmuch as bills for numerous items had not yet been rendered although the materials had been supplied.

Appellants admitted having received statements introduced in evidence showing the amount of bills incurred as the work progressed up to the time that the lien waiver was given. They denied however having received such a statement showing the items constituting the balance for which respondents later sued submitted after the lien waiver was given. There was evidence offered from which the jury might well have concluded that this last statement was received and that a substantial period of time elapsed prior to the institution of suit without appellant Light having questioned it.

More than a year after the lien waiver was given, Light wrote Bruns a letter listing defective items in the construction and stating 'no further approach towards final settlement can be made until the following deficiencies are corrected in the house * * *. When these corrections are made I shall be glad to further discuss this matter with you.'

It is conceded that the question as to defects in construction set up in appellants' counterclaim was resolved against appellants and in favor of respondents by the general verdict of the jury.

In addition to the submission to the jury of the question of liability on the alleged breach of contract, the court asked the jury to render an advisory verdict as to whether or not the lien waiver signed by Bruns had been 'executed by mistake and without the intention of releasing defendants from any liability for a balance owing or claimed to be owing'. The jury answered this question in the affirmative. The court while not bound by this special verdict did enter a finding of fact to the same effect, that is that the lien waiver had been signed without intention to release appellants from obligations not actually paid.

The court instructed the jury in connection with the action for damages that the burden of proof was upon the respondents to establish their case by a preponderance of the evidence, and that the burden was on appellants to prove the claimed settlement or release by respondents. With reference to the advisory verdict the court gave the jury the statutory definition of a mistake of fact, SDC 10.0312, and in addition instructed in substance that when through a mistake a written contract does not truly express the intention of the parties it may be revised, but gave no indication of the degree or quantum of...