Haggard Drilling, Inc. v. Greene, 40117

• Decision Date: 31 December 1975
• Docket Number: No. 40117,40117
• Citation: 195 Neb. 136,236 N.W.2d 841
• Parties: HAGGARD DRILLING, INC., a corporation, Appellant, v. Ralph W. GREENE et al., Appellees.
• Court: Nebraska Supreme Court

Page 841

236 N.W.2d 841

195 Neb. 136

HAGGARD DRILLING, INC., a corporation, Appellant, v. Ralph W. GREENE et al., Appellees.

No. 40117.

Supreme Court of Nebraska.

Dec. 31, 1975.

Syllabus by the Court

1. A quasi-contract is a contract implied in law and usually has its origin in the principle that a person shall not be allowed to enrich himself unjustly at the expense of another.

2. The law will not imply a promise against the express declaration of the party to be charged, made at the time of the supposed undertaking, unless such party is under legal obligation paramount to his will to perform some duty, and he is not under such legal obligation unless there is a demand in equity and good conscience that he should perform the duty.

3. The mere fact that a third person benefits from a contract between two other persons does not make such third person liable in quasi-contract or unjust enrichment.

4. Where a third person benefits from a contract entered into between two other persons, in the absence of some misleading act by the third person, the mere failure of performance by one of the contracting parties does not give rise to a right of restitution against the third party.

McGinley, Lane, Mueller, Shanahan, McQuillan & Gale, Ogallala, for appellant.

Curtis & Curtis, Imperial, for Helen Maddux.

Owens & Owens, Benkelman, for Thomas A. Maddux.

Heard before SPENCER, McCOWN and NEWTON, JJ., and COLWELL and IRONS, District Judges.

COLWELL, District Judge.

This is a suit to recover $13,219.60 as the unpaid balance due for drilling five irrigation wells. Plaintiff claims three theories of recovery, express contract, implied contract, and quasi-contract based upon unjust enrichment. Defendant Ralph W. Greene was not served with process; he did not appear. The default of defendant Edward L. Lewis was entered. Issues were joined as to defendants Maddux, and trial thereon was had to the court. Judgment was entered for defendants Maddux. We affirm.

On April 17, 1970, defendants Thomas A. Maddux and Helen Maddux, husband and wife, as sellers, by written option and agreement, granted to Ralph W. Greene and Edward L. Lewis an option to purchase a 3,800-acre ranch in Hayes County, Nebraska, hereafter called the Palisades Place. At the time the sellers lived on another nearby ranch property called the Enders Place. Both ranch properties were titled in the name of Thomas A. Maddux. Buyers were residents of Colorado. The material parts of the option are: 'It is mutually agreed that the consideration for this option shall be that the Buyers shall, at their own expense, procure to be drilled, gravel packed and capped in a good and workmanlike manner in keeping with the standards of the area a total of twelve irrigation wells: seven of these wells shall be located upon the Sellers home place and five of these wells shall be located upon the real estate hereinabove described. It is further agreed that the Buyers shall make arrangements on the day of execution of this agreement with Haggard Drilling Company of Imperial, Nebraska, to do this work and the Buyers shall make all arrangements for the payment to the driller and shall hold harmless the Sellers from any cost or loss caused thereby. * * * In the event that the Buyers shall elect to exercise their option to purchase the hereinabove described real estate under the terms hereinafter set forth, then they shall have credit for the cost of the seven wells drilled on the Sellers home place, but they shall have no credit for the five wells drilled on the hereinabove described real estate, on the total purchase price. * * * In the event the Buyers elect to exercise their option to purchase the real estate, then the Sellers agree to sell to the Buyers and the Buyers agree to buy from the Sellers the hereinabove described real estate for the good and valuable consideration of money to be paid, acts to be performed and promises to be kept, the value and sufficiency whereof as consideration being mutually herewith acknowledged by the execution of this instrument, under the following terms and conditions: * * * A. 1. The Buyers shall have the right to purchase said real estate for the cash purchase price of $380,000.00, * * *. 2. Alternatively, the Buyers shall have the right to purchase said real estate for the installment sale price of $400,000.00, which shall be payable as follows: * * * a. The Buyers agree to purchase real estate of a cost of $50,000 or less as designated by the Sellers and to exchange the same as a part of this transaction in such manner as shall be most advantageous to the Sellers for tax purposes and which shall not increase the total cost of the Buyers. * * * b. On November 1st, 1970, to pay to the Sellers a sum of money equal to 29% Of the installment sale price after the purchase hereinabove described at A. 1. a. * * * This sum of money shall be diminished by the cost of the seven irrigation wells on the Sellers home place as described in the option consideration. * * * H. In the event the Buyers fail to accept the option hereinabove granted, then the improvements accomplished by the twelve irrigation wells hereinabove described shall be the sole property of the Sellers, and the Buyers shall have no further liability to the Sellers arising from the option portion of this agreement.'

The deadline for exercising the option by the buyers or other persons they might direct was May 18, 1970. After executing the option defendant Helen Maddux did nothing more concerning that instrument, its terms, or its performance.

On April 17, 1970, Greene, Lewis, and Thomas A. Maddux talked to Jon Elson, manager of the Haggard & Sargent Drilling Company at its office in Imperial, Nebraska, concerning the drilling of 12 irrigation wells as provided in the option. Shortly thereafter there were more than two other conversations on the same subject matter between Lewis, Greene, and Elson. A copy of the option was exhibited to Elson; he read parts of it; and he understood the ownership of the lands involved and the relationship of the parties to the option, particularly, that the buyers had the sole obligation to secure the drilling of 12 wells and pay for the same. Elson submitted the drilling proposition to the board of directors of the Haggard & Sargent Drilling Company, which generally approved its acceptance and understood the buyers were to pay for the wells. Thereafter it was orally agreed between Elson, acting for the Haggard & Sargent Drilling Company, and Lewis and Greene for the Spring Creek Land and Cattle Company to drill the 12 wells as provided in the option. It was understood and agreed that Lewis and Greene were obligated to pay for the well drilling on the basis of reasonable charges, less 5 per cent discount for volume and the making of payments every 30 days. There was no understanding between any of the parties that the sellers were to pay or underwrite or guarantee the payment for any of the wells drilled; and there is no evidence in the record that sellers at any time represented to the driller or its...