Harris v. Faris-Kesl Const. Co.

• Decision Date: 04 April 1907
• Citation: 13 Idaho 211,89 P. 760
• Parties: PHIL HARRIS, Respondent, v. FARIS-KESL CONSTRUCTION COMPANY, Appellant
• Court: Idaho Supreme Court

89 P. 760

13 Idaho 211

PHIL HARRIS, Respondent, v. FARIS-KESL CONSTRUCTION COMPANY, Appellant

Supreme Court of Idaho

April 4, 1907

CONSTRUCTION OF CONTRACT-SURROUNDING FACTS AND CIRCUMSTANCES-MEASURE OF DAMAGES-PROSPECTIVE PROFITS.

1. Where H. and the F.-K. Con. Co. entered into a contract whereby H. was to furnish all the hardware and put in place more than two millions of feet of lumber in the construction of flumes, trestles, etc., and the company was to furnish all the lumber at the times and places where demanded by H., and it fails to do so, and suit is brought to recover prospective profits, the court in construing such contract should admit in evidence the facts and circumstances surrounding the making of the contract and the reasons for the failure of the company to furnish the lumber in accordance with its terms.

2. If the failure to perform on the part of the company was because of its intention to force or compel H. to terminate the contract, the measure of damages would include the prospective profits had the contract been completed; but if the company was endeavoring, in good faith, to comply with its part of the contract, but was prevented in doing so from no fault of its own, H. could not terminate the contract and recover prospective profits, but he might terminate it, and his measure of damages would be the value of his work already performed, and whatever damages he had sustained by reason of the delays occasioned by the company, and the loss occasioned, if any, on account of having procured the necessary outfit and appliances for carrying out the contract, should be divided between the parties in the proportion that the work already done bears to that yet to be done.

3. In cases where prospective profits may be recovered, the rule for arriving at the prospective profits is to ascertain the difference between the cost of doing the work and what the claimant was to receive for it, making therefrom a reasonable deduction for the less time engaged and for the release from the care, trouble, risk, and responsibility attending a full execution of the contract.

(Syllabus by the court.)

APPEAL from the District Court of Third Judicial District for Ada County. Hon. Geo. H. Stewart, Judge.

Action to recover prospective profits for the violation of a contract for the construction of a flume, trestles, etc. Judgment for the plaintiff. Reversed.

Judgment reversed and a new trial granted. Costs of this appeal awarded to the appellant.

S. H Hays, for Appellant.

In order to properly construe the contract between the parties the court should have admitted evidence showing the surrounding conditions and circumstances at the time of making the contract. (Page on Contracts, sec. 1123; Merriam v. United States, 107 U.S. 437, 27 L.Ed. 531, 2 S.Ct. 536; True v. Rocky Ford C. R. & L. Co. (Colo.), 85 P. 842; Westheimer v. Thompson, 3 Idaho 560, 32 P. 205; Juliaetta Tramway Co. v. Vollmer, 4 Idaho 408, 39 P. 1115.)

The provision of the contract that the lumber would be delivered at the time desired by plaintiff must be construed in the light of the other circumstances. Defendants were entitled to a reasonable time in which to deliver the lumber after the cutting lists were received, and there was no breach until the expiration of such time. The ruling of the court rejecting the evidence offered was reversible error. An erroneous rule of damages was applied by the court.

Where an action is brought by the contractor before the completion of the work to authorize a recovery for prospective profits, a willingness on his part to complete the work and a refusal by defendant to be further bound by the contract or an abandonment of it by him must appear. (Wharton & Co. v. Winch, 140 N.Y. 287, 35 N.E. 589; Lake Shore etc. Ry. Co. v. Richards, 40 Ill.App. 560; Fitzgerald v. Hayward, 50 Mo. 516.)

The principal covenant in this contract was that defendant was to deliver lumber to plaintiff at various points along a distance of sixteen miles. The subordinate or incidental covenant was that the lumber was to be delivered "at the time and place desired" by plaintiff. A failure to deliver promptly or at the exact place desired would not be such a breach as would authorize plaintiff to terminate the contract. His remedy is to complete the work and sue for damages for delay, or for damages caused by failure to deliver at the place desired. (Kaufman v. Raeder, 108 F. 171, 47 C. C. A. 278, 54 L. R. A. 247; Monmouth Park Assn. v. Warren, 55 N. J.L. 598, 27 A. 932; Page on Contracts, sec. 1450.)

The fact that they disagreed as to who should stand the expense of moving does not change the rule. (Warren v. Stoddart, 105 U.S. 224, 26 L.Ed. 1117.)

Time is not regarded as of the essence of the contract where it concerns a provision, a breach of which does not constitute a total failure of consideration. (Page on Contracts, secs. 1159-1164; Lynch v. Bechtel, 19 Mont. 548, 48 P. 1112.)

The damages were improperly computed even under the rule fixed by the court. No allowance was made for the hazard of the business as should be done. (United States v. Speed, 8 Wall. 77, 19 L.Ed. 449; Waco Tap R. R. Co. v. Sherley, 45 Tex. 355; Shoemaker v. Acker, 116 Cal. 239, 48 P. 62 (247); Insley v. Shepard, 31 F. 869.)

S. L. Tipton, for Respondent.

The party who engages to do work has a right to proceed freely without any let or hindrance of the other party, and if such other party interferes, hinders and prevents the doing of the work to such an extent as to render his performance difficult and largely diminishes the profits, he may treat the contract as broken, and is not bound to proceed under the added burdens and incurred expense. (Anvil Min. Co. v. Humble, 153 U.S. 540, 38 L.Ed. 814, 14 S.Ct. 876.)

A failure to furnish the lumber as called for under the contract of plaintiff at the time and place desired and when needed went to the very substance of the contract of plaintiff. Without the lumber of the kinds needed he could do nothing, as much so as if the defendant had absolutely repudiated the contract. It was a condition precedent to its further prosecution. (Palm v. Ohio & M. R. Co., 18 Ill. 217; Lake Shore M. S. R. Co. v. Richards, 40 Ill.App. 560; Goodrich v. Hubbard, 51 Mich. 62, 16 N.W. 232; Dibol v. Minott, 9 Iowa 403.)

"Where there is a substantial conflict in the evidence, a finding of fact based thereon will not be disturbed." (Spaulding v. Coeur d' Alene R. & Irr. Co., 5 Idaho 528, 51 P. 408.)

The contract was not attacked in this case on the ground of fraud, and it is not claimed that through mistake or inadvertence of the parties any material portion thereof was left out in reducing the contract to writing, and it appears on its face to be full and complete; hence we must regard the said contract as containing the entire agreement between the parties. (Tyson v. Neill, 8 Idaho 607, 70 P. 790; Jacobs v. Shenon, 3 Idaho 274, 29 P. 44.)

In the absence of fraud or mutual mistake, no representation, promise or agreement made, or opinion expressed in the previous parol negotiations as to the time or legal effect of the resulting written contract can be permitted to prevail, either in law or in equity, over its plain provisions and proper interpretation. (Connecticut Fire Ins. Co. v. Buchannan, 141 F. 877, 4 L. R. A., N. S., 758.)

"This evidence, if admitted, would change the contract from a certain contract to a contingent contract." ( Covington v. Kenewah Coal & Coke Co. (Ky.), 89 S.W. 1126, 3 L. R. A., N. S., 248.)

For a breach of this contract the plaintiff can recover lost profits as damages. (United States v. Behan, 110 U.S. 344. 28 L.Ed. 168, 4 S.Ct. 81; Hale v. Trout, 35 Cal. 229; Tahoe Ice Co. v. Union Ice Co., 109 Cal. 242, 41 P. 1020; Wells v. Nat. Life Assn. of Hartford, 99 F. 222, 39 C. C. A. 476, 53 L. R. A. 33.)

When loss of profits arising from a breach of contract can be proved with a reasonable certainty, and such loss is directly traceable to the breach of the contract, that loss may be recovered in an action for the breach. (Anvil Min. Co. v. Humble, supra; Watson v. Gray's Harbor Brick Co., 3 Wash. 283, 28 P. 527.)

SULLIVAN, J. Ailshie, C. J., concurs.

OPINION

SULLIVAN, J.

This is an action brought to recover damages for alleged lost profits for breach of a contract in the sum of $ 4,504 and for balance due on account of $ 33.75, and for material furnished of the value of $ 252. The cause was tried by the court without a jury, and the court found the plaintiff was entitled to recover $ 3,897.06 as lost profits for the breach of the contract, and found against the plaintiff on the balance of account claimed, and in his favor for the value of the material furnished. No question is raised on this appeal in regard to second and third causes of action. The questions raised by the appeal are based on the judgment rendered for prospective profits. The contract upon which this suit is based was entered into by the plaintiff and defendant on the twenty-fifth day of July, 1905, for the construction of all flumes, trestles, etc., on the Canyon County Canal thereafter to be constructed in Canyon County. The parts of the contract material to a decision of this case are as follows:

"THIS AGREEMENT, Made and entered into in duplicate, this 25th day of July, A. D., 1905, by and between Phil Harris. of Emmett Canyon County, State of Idaho the party of the first part, and Faris-Kesl Construction Company, Limited, a corporation, of Boise, County of Ada, State of Idaho the party of the second part, WITNESSETH:

"That the said party of the first part, for and in consideration of the covenants, promises and agreements hereinafter contained on the part and behalf of the said party of the second part, does...