Charles City v. Rasmussen

• Decision Date: 02 April 1929
• Docket Number: 39378
• Citation: 232 N.W. 137,210 Iowa 841
• Parties: CITY OF CHARLES CITY, Appellee, v. EMIL RASMUSSEN et al., Appellants
• Court: Iowa Supreme Court

232 N.W. 137

210 Iowa 841

CITY OF CHARLES CITY, Appellee, v. EMIL RASMUSSEN et al., Appellants

No. 39378

Supreme Court of Iowa, Des Moines

April 2, 1929

OPINION ON REHEARING SEPTEMBER 22, 1930.

Appeal from Floyd District Court.--C. H. KELLEY, Judge.

Action at law against the defendants, Emil Rasmussen and his bondsmen, who constructed certain street improvements involved herein, and asking recovery for a failure to repair as per defendants' contract. Five separate actions are consolidated. There was a verdict and judgment for the plaintiff, and the defendants appeal.

Reversed.

Pickett Swisher & Farwell, for appellants.

R. W. Zastrow, J. C. Campbell, and Thomas A. Beardmore, for appellee.

ALBERT J. MORLING, C. J., and EVANS, STEVENS, FAVILLE, DE GRAFF, KINDIG, and WAGNER, JJ., concur.

OPINION

ALBERT, J.

In the year 1920, street improvements, consisting of curbing, guttering, and pavement on certain streets in the said city were constructed by the defendant Rasmussen. The work was done under five separate and distinct contracts, each covering work on certain designated streets. The work and improvements were all accepted by the city in the latter part of the year 1920. The contracts for the work are substantially the same in all cases, and the bonds given therewith are also substantially the same. Further reference will be made to both later in the opinion.

At various times during the succeeding years, notices were given to Rasmussen of defects in the improvements, and he repaired the same. Other defects arose later, and he refused to carry out the terms of his contract as to repairs. The city had some repairs made after Rasmussen's refusal to perform, and notified him of other defects which needed repair.

I. One of the errors claimed as a basis for reversal is the alleged prejudicial partisanship of the trial judge. While the court was rather generous in his remarks during the trial of the case, a careful study of the record satisfies us that there was no prejudicial error in his attitude or the conduct of the trial.

II. Complaint is made that in the instructions the court referred to the "Rasmussen contract." Reference was intended thereby to be directed to a contract with Rasmussen and some outside parties to do repair work. If there was any error in this instruction, it was in favor of the defendants, and they cannot complain of this reference to the so-called "Rasmussen contract."

III. Under one of the contracts involved in this case, the pavement was laid on certain streets which, at the time of the bringing of this action, were claimed to be in need of repair. No repair work had been done on the streets covered by this latter contract, but the jury was allowed to find damages in favor of the city for the cost of repair of said streets, and this damage was fixed at something over $ 1,400. It is now urged that the city was not entitled to recover for the repair work necessary on these streets, because it had not repaired the same or made any effort to do so, and therefore the action was premature, in so far as this item of damage is concerned.

The question, reduced to its last analysis, is: Was it a condition precedent for the maintenance of such an action that the city must, in the first instance, repair, and thus measure its damages by the cost of such repair? Both sides have discussed this question without citation of authority.

In the case of National Sur. Co. v. City of Huntsville, 192 Ala. 82 (68 So. 373), the Alabama court had before it this identical question. The question there involved was the liability of the sureties on a paving contractor's bond, for a breach thereof for a failure to repair certain paving in the streets of the city of Huntsville. The question there raised, as here, was that the city had not made the repairs, and that, until it did so repair, an action could not be maintained; or, in other words, that the actual repairing must be done by the city, as a condition precedent to maintaining the action. It was there held that the doing of the repair by the city was not a "condition precedent" to the maintenance of the action for damages on the bond.

In Wills v. Peace Creek Drainage Dist., 4 F.2d 519, the Circuit Court of Appeals for the Fifth Circuit had before it a contractor's bond, where the contractor had abandoned the work, and suit was instituted for damages for breach of the contract. The court said:

"We are of the opinion that the plaintiff was not bound, as a condition precedent to recovery by it on the bond, to complete the work which the contractors had agreed to do. The contract secured to the plaintiff the right to have the drainage work done at an agreed cost. The contractors, by abandoning their contract, damaged the plaintiff in the amount represented by the reasonable cost of completing the work, over and above the cost stipulated in the contract. * * * That plaintiff's right to recover is not dependent upon completion of the work which the contractors obligated themselves to do, is well settled. All American Oil & Gas Co. v. Connellee, 3 F.2d 107; * * * Simons v. Wittmann, 113 Mo.App. 357 (88 S.W. 791); King v. Nichols & Shepard Co., 53 Minn. 453 (55 N.W. 604); * * * 3 Williston on Contracts (1920 Ed.), Section 1363; 2 Sedgwick on Damages (9th Ed.), Section 643; 3 Sutherland on Damages (4th Ed.), Section 699."

In the case of Board of Education v. Maryland Cas. Co., 27 F.2d 20, the Casualty Company gave a bond assuring the performance of Burke Bros. Company, who engaged to erect a building of a certain kind at a named cost for the plaintiff. The court there said:

"Breach of the contract faithfully to perform was likewise a breach of the bond, and on that breach the rights of the plaintiff municipal corporation and the liability of the defendant surety company became fixed. United States v. U.S. Fidelity Company, 236 U.S. 512, 524, 35 S.Ct. 298, 59 L.Ed. 696. Failing, because of the breach, to obtain the building contracted for, the plaintiff next had a right to damages. * * * As the contractor failed to perform, its surety may be called upon at once to pay the damages, without waiting for the completion of the building by the owner or another party. Indeed, the building may never be completed, for, unless otherwise provided by the contract, and the owner is not required to complete the work abandoned by the contractor as a condition precedent to recovery on a bond of assurance * * * [citing, among other cases, Cincinnati & S. R. Co. v. Incorporated Village of Carthage, 36 Ohio St. 631], yet the surety will be liable for damages occasioned by the breach."

In 3 Sutherland on Damages (4th Ed.) 2600, it is said:

"It is immaterial to the right to recover according to the rule stated, that the defects complained of have not been remedied."

This pronouncement is made on the strength of Logansport, C. & S.W. R. Co. v. Wray, 52 Ind. 578; Ekstrand v. Barth, 41 Wash. 321, 83 P. 305.

In King v. Nichols & Shepard Co., 53 Minn. 453 (55 N.W. 604), there was a breach of a contract to put machinery in good repair and condition, and allegations as to what it would cost to put it in good repair and condition. The court said:

"Upon such a contract as this,--to wit, to put the machine in good repair and condition,--it was not necessary that, in order to recover, plaintiff should himself put it in that condition. As soon as defendant failed to do what it agreed to do, plaintiff might recover the reasonably necessary cost of doing it."

In Newton v. Consolidated Const. Co., 184 Mich. 63 (150 N.W. 348), the Supreme Court of Michigan had before it for review a case wherein a contract had existed for the construction of a building at a fixed price. After a partial effort had been made to construct it, it was destroyed by a windstorm, and the contractors refused to proceed further. The property owner brought action against the contractor and the surety company on its bond. He (the property owner) among other things testified that he intended to build at some time. It was held that such testimony was wholly immaterial, and that he need not build as a condition precedent to maintaining his action for damages on the bond.

We must, therefore, conclude that the city is not required to do this repair work before it can maintain an action on the bond. It seems that, where the contract provides for such contingency as arose here, giving the owner the right to complete the work at the contractor's expense, such provision is not compulsory. United States v. United States Fid. & Guar. Co., 236 U.S. 512, 59 L.Ed. 696, 35 S.Ct. 298; Ramsey v. Perth Amboy Shipbuilding & Eng. Co., 72 N.J.Eq. 165 (65 A. 461), affirmed in 73 N.J.Eq. 742 (70 A. 1101); Board of Education v. Maryland Cas. Co., supra.

IV. The contracts entered into in this case provided, among other things, that:

"The contractor shall and does agree and guarantee that said improvement shall be and remain in first-class condition true and even surface, * * * free from cracks and breaks or settlements out of line or grade, or any defects of material or workmanship used in the construction thereof, or in connection therewith at the time of its completion and acceptance by said city, and for the term of five years thereafter, and in case any cracks, breaks, disintegration or any other defects or settlements (as to material or workmanship) shall exist in said curb and gutter and pavement or appear within five years thereafter and in case any cracks, settlements...