Colorado Yule Marble Co. v. Collins

• Decision Date: 01 December 1915
• Docket Number: 4226.
• Citation: 230 F. 78
• Parties: COLORADO YULE MARBLE CO. v. COLLINS.
• Court: U.S. Court of Appeals — Eighth Circuit

230 F. 78

COLORADO YULE MARBLE CO. v. COLLINS.

No. 4226.

United States Court of Appeals, Eighth Circuit.

December 1, 1915

Francis A. Brogan, of Omaha, Neb., for plaintiff in error.

Arthur R. Wells, of Omaha, Neb. (John F. Stout and Halleck F. Rose both of Omaha, Neb., on the brief), for defendant in error.

Before SANBORN, ADAMS, and SMITH, Circuit Judges.

SMITH Circuit Judge.

The plaintiff in error, the Colorado Yule Marble Company hereafter called the defendant, is a corporation organized under the laws of Colorado. The Nebraska Mausoleum Company of Omaha, Neb., had let to the Colorado Yule Marble Company as architects, marble dealers, etc., a contract to erect a 600-crypt mausoleum with chapel at West Lawn Cemetery at Omaha. The Colorado Yule Marble Company sublet a portion of the contract to the defendant in error, George J. S. Collins hereafter called the plaintiff, for $40,000. The latter contract was in writing, and contained, among others, the following stipulations:

'The said Collins hereby agrees to commence the work at once and prosecute the same to complete finish to the entire satisfaction of the said C.Y.M. Co. with all possible dispatch and under the direction of the superintendent in charge, and to furnish a full sufficiency of labor and skilled mechanics at all times when it is possible to proceed. The said Collins further agrees that all materials used shall be the best quality of their respective kinds, that all work performed shall be executed in the most skillful and workmanlike manner, and the said Collins further covenants and agrees that the bond furnished in amount $20,000 shall be security for the satisfactory performance and fulfillment of the contract. * * * Payments to be made monthly upon estimates by the aforesaid superintendent of the said C.Y.M. Co., provided, however, that all work up to the estimated and claimed amount is satisfactory to the said C.Y.M. Co.'

The contract was signed August 24, 1912. That was Saturday. No bond was ever given as provided in the contract, except as hereafter explained, but on Monday, August 26,1912, Mr. Collins commenced work under the contract and worked steadily until October 7, 1912. On Saturday, October 5th, Mr. Savage, an agent of the defendant, told Mr. Collins to quit work; that they were trying to reorganize both the Mausoleum Company and the Marble Company. Mr. Collins said they were then in the middle of one of the bays, and he thought it advisable to finish that work before he stopped, and the completion of that took until Monday, October 7th. Up to that time the total work done was of the value of $1,085.37, which was covered by two certificates of the superintendent of the Marble Company, the first for $835.37 and the second for the balance. No part of these estimates has ever been paid. On November 25, 1912, plaintiff commenced suit in the district court of Douglas county, Neb. His petition was in two counts. In the first he sought to recover $1,085.38. In the second he sought to recover $6,000 for profits he would have made if allowed to go on with the work, and if the same was paid for under the contract. On the same day he secured an attachment, which was served by garnishing several parties. Upon application of defendant the case was removed to the United States District Court for Nebraska, and there defendant answered. The case was tried to a jury, who found for plaintiff in the sum of $7,172.10, and judgment was rendered therefor. Thereupon the defendant sued out a writ of error to this court.

In its argument the Marble Company says:

'In its assignment of errors (page 85), on bringing this case to this court for review, the Marble Company relies upon the following propositions, which are indicated and preserved in various ways in the record:

'I. The action was prematurely brought for the recovery of the total profits on the contract, for the reason that the evidence wholly fails to show a total, anticipatory breach of the contract, such as would justify the bringing of such an action.

'II. Before the plaintiff could bring an action for such total breach, it would be necessary for him to have tendered full performance on his part, including the giving of the bond, which, on his own showing, had been only temporarily waived, but not entirely eliminated from the agreement.

'III. The plaintiff, having suspended work at the request of the defendant for the purpose of enabling some difficulties to be adjusted, could not thereafter put the defendant in default as for a breach of the contract, without giving notice that unless he was permitted to resume the work he would treat his prevention as a breach.

'IV. Error in the giving of instructions, even on the theory of the trial court. These will be pointed out in detail.'

As bearing upon the first three of these points it should be borne in mind that this was a partially executed contract, and a number of the authorities agree that there is da difference between contracts wholly executory and those executed in whole or in part. But in Roehm v. Horst, 178 U.S. 1, 20 Sup.Ct. 780, 44 L.Ed. 953, the Supreme Court after a most exhaustive consideration of both English and American authorities held substantially that there was no difference between purely executory and partly executed contracts, and that where one party to a contract clearly and positively renounced his contract before any part of it was executed a cause of action for the loss of profits accrued at once to the other party. That opinion is quite conclusive, so far as it goes, upon this court, as it was upon the District Court.

In Elliott on Contracts it is said:

'Sec. 2028. Renunciation-- anticipatory Breach-- Controlling American Rule.--The American courts, with almost practical unanimity, adopt the rule of the English courts and hold that an unqualified and positive refusal to perform a contract before performance is due may be regarded as a complete breach of the contract, where the renunciation goes to the whole contract, and the injured party may bring his action at once.'

This is supported in a note by a vast number of authorities. There has been some confusion on this subject by reason of the use of the term 'rescission' in connection therewith. If there be a complete rescission of a partially executed contract there is no cause of action on the contract, but the only remedy of the party who has not been in default is a suit upon a quantum meruit. But the confusion between a breach of contract and a mutual rescission results in a confusion as to the remedy.

It is true that in section 2029 of Elliott on Contracts it is said that Massachusetts, North Dakota, Maine, and Nebraska have in varying measure dissented from the English and American doctrine, and it is also true that this contract was a Nebraska contract and was there to be performed. But this can be of no controlling weight with us. This was a case not arising under the statutes of Nebraska, but under the common law and the rules of general jurisprudence. The federal courts accept the interpretation put by the courts of a state upon its own Constitution and statutes, but do not follow it as to the common law or general jurisprudence. Baltimore & Ohio Railroad Co. v. Baugh, 149 U.S. 368, 13 Sup.Ct. 914, 37 L.Ed. 772; Gardner v. Michigan Central Railroad Co., 150 U.S. 349, 14 Sup.Ct. 140, 37 L.Ed. 1107; Chicago, Milwaukee & St. Paul Ry. Co. v. Solan, 169 U.S. 133, 18 Sup.Ct. 289, 42 L.Ed. 688. If the defendant wanted the benefit of the exceptional rule adopted in Nebraska, its remedy was to not remove the case from the state court, where it was pending, to the federal court, where it now is.

The first question to be determined in this case in the District Court was whether the defendant renounced the contract before this suit was brought by positive, distinct, unequivocal, unconditional, and absolute conduct. Here it must be borne in mind that the question is not, did the defendant so renounce the enterprise? but, did it so renounce the contract? The defendant cites Dingley v. Oler, 117 U.S. 490, 6 Sup.Ct. 850, 29 L.Ed. 984. But that case simply held that, if what it was claimed was a renunciation was not of the positive, distinct, unequivocal, unconditional, and absolute character necessary to constitute a renunciation in law, no action would lie.

In this case the plaintiff had agreed to commence the work at once and prosecute the same to completion with all possible dispatch, and to furnish a full sufficiency of labor and skilled mechanics at all times when it was possible to proceed. The company agreed to make payments monthly. No payment was made on October 1st and November 1st, and no definite assurance seems to have been given when these payments were to be made, but on October 5th the defendant ordered the plaintiff to violate the...