Burt v. Road Improvement District No. 11

• Decision Date: 04 June 1923
• Docket Number: 117,22
• Parties: BURT v. ROAD IMPROVEMENT DISTRICT NO. 11
• Court: Arkansas Supreme Court

253 S.W. 1

159 Ark. 275

BURT v. ROAD IMPROVEMENT DISTRICT NO. 11

No. 117, 22

Supreme Court of Arkansas

June 4, 1923

Appeal from Prairie Chancery Court, Southern District; John M Elliott, Chancellor; reversed.

Decree affirmed in part and reversed and remanded in part.

Hughes & Hughes, for appellant.

The contract with the district was valid without the giving of the bond in advance of the time of beginning work. Secs. 5399 to 5462, Crawford & Moses' Digest. By allowing Burt to continue the work under the contract, urging his doing so without the bond being given, his default in not making it cannot afterwards be treated as a total breach thereof. 102 Ark. 79. The contract was not terminated because of Burt's failure to give the bond. The district's failure to pay the installments as they became due for work done constituted a breach of the contract, and, being in default itself, it could not insist on performance by Burt as a condition precedent to payment. 88 Ark. 497. Any failure of making progress with the work arose from Burt's not being paid for work done in accordance with the terms of the contract. Even if the compensation of Burt must be fixed on basis of quantum meruit, he is entitled to recover what the work was reasonably worth when it was done. The contract was kept alive in fact, and he should be paid according to its terms. The three notes of Burt should be surrendered and canceled. He agreed to stand that much loss in order that par could be paid for the bonds and in consideration that he should do the work. The plan failed the man to whom he gave the notes, who transferred them to the district, could not handle the bonds, which were finally sold to another, and the work was taken away from Burt, and if ever there was a consideration for the notes, it certainly failed. After Burt was deprived of the contract, he should not be held liable for deterioration of work done. The district had taken it over. Under the terms of the contract the district could take over the work, and could only deduct the cost of completing it from the sum which would otherwise have been payable to the contractor, had he finished it.

Emmet Vaughan, for appellant W. T. Burks.

Burks, appellant, was a subcontractor for Burt, and the district owes him in any event for the work done under the supervision of its engineer and accepted by it. He also is entitled to recover from the district under § 5448, C. & M. Digest, the principal contractor having failed to pay him. If the commissioners knew the district was not liable to the contractor, Burt, because of his failure to file bond, then by allowing appellant, sub-contractor, to proceed with the work under direction of its engineer, it became liable to payment for work done. 19 Ark. 671; 26 Ark. 360; 72 Ark. 354, 80 S.W. 749; 2 Ark. 370; 124 Ga. 61; 38 Ill. 266; 82 Ill. 259; 18 B. Man. (Ky.) 41; 17 N.Y. 499; 16 Pa.Super. Ct. 484; 61 A. 471; 127 N.Y. 575.

Cooper Thweatt, for appellee district.

The contract between Burt and the district was void because the bond required by the statute was not given. Sec. 5446, C. & M. Digest; Carswell v. Hammock, 127 Ark. 119; 2 Dillon on Municipal Corporations, 1263; 28 Cyc. 1040; Baker v. Southern, 47 S.W. 608; Bowditch v. Superintendent, 46 N.E. 1026. Acts of public agents not binding on agency represented unless done in manner required by law. 19 R. C. L. 1063; 28 Cyc. 1043; 152 Ark. 507; 147 Ark. 267; 79 Ark. 234; 94 Ark. 381; 61 Ark. 79; 9 C. J. 730. The court erred in allowing Burt credit on a quantum meruit for the work done. 19 R. C. L. 1064; 28 Cyc. 1043; 124 Ark. 11; 146 Ark. 63. District is entitled to recover payment made to Burt. 117 Ark. 336; 114 Ark. 289. Even conceding that the bond could be waived, which it could not be, of course, it was only a waiver of one of the several breaches of the contract. Burt abandoned the work, and the district rescinded the contract, and the question of waiver is really unimportant. The commissioners often demanded that the bond be made, but it was never done. Burt was not making any substantial progress with the work, and finally abandoned it. Was in no position, being in default, to claim the district had breached the contract by failing to make a payment on August 10. 93 Ark. 453; 142 Ark. 434; 61 L. R. A. 407. Payment of Aug. 10 did not become due because Burt had failed to pay subcontractor. The contract provides for building a completed road, and Burt, having abandoned the work, without fault on the part of the district, forfeited all rights thereunder, could not recover for work done, nor retain the payments received. 236 U.S. 512; 79 Ark. 506; 166 S.W. 556; 102 Ark. 152; 137 Ark. 375; 6 R. C. L. 974; 9 C. J. 819; 38 Ark. 103; 87 Ark. 328. The district did not accept but rather retained benefit of work performed. 64 Ark. 34. The district had the right to retain the certified check, under the terms of the contract, as liquidated damages. 2 Dillon, Municipal Corporations, 1222; 28 Cyc. 1032; 30 So. 694. Under facts of this case the district cannot be compelled to pay Burt the saving made in the completion of the contract after he had abandoned the work. 236 U.S. 512, 35 S.C.298; 120 Ark. 435; 124 S.W. 900; 83 N.E. 997.

OPINION

WOOD, J.

On the 10th day of April, 1920, one J. A. Burt (hereafter called appellant) entered into a contract with Road Improvement District No. 11 (hereafter called district) to construct a road for the district. He was to complete the work within two hundred working days. The appellant deposited a certified check in the sum of $ 5,000 to guarantee the execution of the contract. The commissioners of the district refused to award the appellant the contract unless the bonds of the district could be sold for par. Appellant procured one H. C. Argo president of the First National Bank of Cotton Plant, Arkansas, to make a contract with the district to buy the bonds at par. Appellant gave Argo his notes in the sum of $ 6,200 as a consideration therefor. Argo transferred the notes to the district as part payment of the purchase price of the bonds. Appellant began work on April 26 by putting a crew to moving fences and telephone poles and by employing one W. T. Burks as a subcontractor to grade part of the road.

Appellant failed to make bond. The appellant was paid for the work done in May and June, amounting to the sum of $ 7,177.40. Appellant paid W. T. Burks for the work done by him in May, but failed to pay him for his work in June. The district refused to pay appellant for the work done in July, due August 10, because of his alleged failure to give bond and to pay his subcontractor, but told him it would pay him if he would give the bond, pay his men, and proceed to expedite the work. On August 23 the district employed other contractors to assist appellant, by grading the road through the bottom lands. Burks performed his subcontract and completed the same about August 30. There was due him for his work the sum of $ 10,445.73. On September 27th the district cashed the $ 5,000 certified check of the appellant and paid same to Burks, leaving a balance due of $ 5,445.73. On October 27th the appellant made an assignment of all his property in this State for the benefit of his creditors.

This action was begun by Burks against the appellant and the district and its commissioners. He set up the contract between the appellant and the district, and alleged that he had a subcontract under appellant; that he performed work according to his contract, and that there was due him the balance of $ 5,445.73. He made the trustees of appellant in the assignment parties, and also the People's Bank of DeVall's Bluff, the depository of the district, and sought to impound the funds in its hands for the payment of his claim.

The appellant and the trustees in the assignment answered and alleged that Burks had been paid all sums of money due him directly by the district. They made their answer a cross-complaint against the district, setting up the contract of the district with the appellant, and alleged that he did all the work of clearing the right-of-way, which amounted to the sum of $ 5,000; that the district had never paid; that he had sublet the excavation work to Burks; that the district had breached the contract in letting out work to others; and that, but for such breach, appellant would have been able to complete the work at a large profit. They alleged that appellant had deposited a certified check with the district for $ 5,000, which the district had cashed, and they prayed that an accounting be had, and that they be given a decree for the amount due the appellant.

The district answered the cross-complaint, denying that it had violated the contract with appellant, and denying that it was indebted to him in any amount, and alleged that the appellant had failed to give bond, and had abandoned the contract; that he was indebted to the district in the sum of $ 6,200 on notes given by him to Argo, which had been transferred to the district, for which it asked judgment, or that these notes be set-off against any amount that might be found due the appellant. It also made its answer a cross-complaint against Burks, and alleged that the appellant had refused to give bond, and had abandoned his contract; that, under a provision of the contract with the appellant, the district might pay any subcontractor for the work performed by such subcontractor out of any money due the contractor, and that under such provision of the contract, the district had paid to Burks the sum of $ 5,000; that at that time nothing was due from the district to the appellant, and that the payment of $ 5,000 to Burks was therefore contrary to the contract, and illegal. The district therefore prayed judgment against Burks in the...