Hudson-Structural Steel Co. v. Smith & Rumery Co.

• Decision Date: 20 December 1912
• Citation: 110 Me. 123,85 A. 384
• Parties: HUDSON-STRUCTURAL STEEL CO. v. SMITH & RUMERY CO. et al.
• Court: Maine Supreme Court

85 A. 384

110 Me. 123

HUDSON-STRUCTURAL STEEL CO.

v. SMITH & RUMERY CO. et al.

Supreme Judicial Court of Maine.

Dec. 20, 1912.

Report from Supreme Judicial Court, Cumberland County, at Law.

Action by the Hudson Structural Steel Company against Smith & Rumery Company and another.

On report. Judgment for plaintiff.

Argued before SPEAR, CORNISH, KING. BIRD, and HALEY, JJ.

Robert T. Whitehouse, of Portland, and Whipple, Sears & Ogden, of Boston, Mass., for plaintiff.

Payson & Virgin, of Portland, for defendants.

SPEAR, J. This case comes up on the following stipulation: "It is hereby stipulated and agreed that the above-entitled cause shall be reported to the law court for final decision upon the facts as reported by the referee; that the record of the case on report shall include the pleadings, the rule of reference, the report of the referee, and this stipulation, that the evidence need not be printed, but that the official stenographer's typewritten transcript of the same may be used before the law court by either party in the manner and to the extent stated in the referee's report." In view of the findings of fact by the referee, but one of the questions of law need be considered, and this will be referred to in its application to the contention of the parties when reached. There is no controversy that the contract provided for the materials and work for the structural steel for the roof framing for the School for Feeble Minded, and that the buildings were to consist of two dormitories. The specifications bore upon the outside of the cover the words "Specifications for Two Brick Dormitory Buildings for the Maine Home for Feeble Minded." As the specifications were made a part of the contract, as before suggested, the contract provided for a roof for each dormitory, while the referee found "there was nothing in the iron and steel items to indicate that the specifications were intended to cover more than one building." The contract was made on the 16th day of August, 1909.

The referee finds that when the contract was signed the plaintiff understood it to call for one building only; that the defendant understood it to call for two buildings; that until some time in November, several months after the contract was made, the plaintiff did not understand that the specifications called for two buildings or that defendant was expecting more than one roof; "that the plaintiff was not negligent in not discovering that the plans and specifications covered two buildings before it executed the contract," and defendant did not know that plaintiff understood that only one building was embraced in the contract. The referee also says: "I find, subject to the opinion of the court, in view of the fact that the defendant had knowledge before executing the contract that at least one other contractor had misinterpreted the plans and specifications as to the number of buildings, and in view of the smallness of the amount which plaintiff proposed to furnish the steel roof framing, it being many hundred dollars less than it would actually cost to furnish roof framing for two buildings, that the defendant, an experienced contractor and bidder on contracts embracing iron and steel structural work, ought to have been put upon inquiry as to whether the plaintiff was not acting under a mistake as to the number of the buildings." It is the opinion of the court that this finding should be sustained.

But notice sufficient to put one upon inquiry imposes upon him such a degree of diligence as will enable him to ascertain the truth, and in failing to so do he will be charged with the knowledge he ought to have obtained by reasonable investigation. Wood v. Carpenter, 101 U. S. 135, 25 L. Ed. 807, in which it is said: "The means of knowledge are the same thing in effect as knowledge itself." Vredenburgh v. Burnet, 31 N. J. Eq. 229; Gale v. Morris, 30 N. J. Eq. 285. "Notice sufficient to put a person on inquiry need not contain complete information on every fact material to his knowledge." Barnes v. McClinton, 3 Pen. & W. (Pa.) 67, 23 Am. Dec. 62; Van Doren v. Robinson, 16 N. J. Eq. 256; Germain, etc., v. Western, etc., Co., 137 Cal. 598, 70 Pac. 658, 59 L. R. A. 575; Furman v. Union Pac. R. Co., 106 N. Y. 579, 13 N. E. 587.

Being put upon inquiry, it was the duty of the defendant to have informed the plaintiff of its apprehension, if not knowledge, as to the plaintiff's misunderstanding. The rule touching this duty is forcibly stated in the Harvard Law Review for June, 1910, p. 622. See, also, Cyc. 34, 921, 922; Webb v. Morrison, 157 N. Y. 712, 53 N. E. 1133; Essex v. Day, 52 Conn. 483, 1 Atl. 620; Welles v. Yates, 44 N. Y. 525; James v. Cutler, 54 Wis. 172, 10 N. W. 147; Venable v. Burton, 129 Ga. 537, 59 S. E. 253; Motherway v. Wall, 168 Mass. 333, 47 N. E. 135.

While under the circumstances not chargeable with positive fraud or actual misrepresentation, in failing to do so, it nevertheless put the plaintiff to the disadvantage of being deceived and misled by the silence or passive conduct of the defendant. Under the finding of the referee that "the plaintiff understood it to call for one building only," thereby laboring under the mistake with regard to a material matter, while the defendant put upon inquiry, understood the contract to call for two buildings, it is the opinion of the court, the contract being subject to cancellation, that the plaintiff should be permitted to recover upon quantum meruit.

But upon this issue the defendant contends that a unilateral mistake cannot avoid a contract. But in view of the facts found by the referee, this contention cannot be sustained. While this view may be correct as to the reforming of a contract, it is not of universal application as to the cancellation of one. Andrews v. Andrews, 81...