Hussey v. Crass

• Decision Date: 01 June 1899
• Citation: 53 S.W. 986
• Parties: HUSSEY v. CRASS.
• Court: Tennessee Supreme Court

53 S.W. 986

HUSSEY v. CRASS.

Court of Chancery Appeals of Tennessee.

June 1, 1899.

Appeal from chancery court, Hamilton county; T. M. McConnell, Chancellor.

Action by D. B. Hussey against J. T. Crass. From a decree for defendant, plaintiff appeals. Affirmed.

Case & Case, for appellant. Shepherd & Frierson, for appellee.

NEIL, J.

The bill in this case was filed to enforce two contracts, under which the complainant alleges that the defendant was indebted to him for a balance of $2,404.20. The first contract is dated July 17, 1890, and states, in substance, that Hussey agreed to do all the trestlework on the 30 miles of road on the line of the D., C. & N. O. R. R., from Decatur in Alabama, north to the state line, according to the plans and specifications furnished by the engineer in charge, and that he would do the work to the entire satisfaction of the said engineer; that estimates were to be taken out on or about the 1st of each month; that 90 per cent. of the said estimate was to be paid about the 15th of the following month, or as soon thereafter as the railroad company should pay or cause to be paid J. T. Crass therefor; that the remaining 10 per cent. should be paid on final estimate being paid to said Crass; that Crass was to furnish all timber delivered at points designated by the engineer; that Hussey was to furnish all the iron and tools and do all the work. On the 25th of August, 1890, another contract was entered into whereby said Hussey agreed with said Crass to do all the pony truss work and drive all piles on the above-mentioned 30 miles of road, this work to be completed September 30, 1890, to the entire satisfaction of the engineer in charge of the work; that Crass should pay for said work $16 per 1,000 feet for pony trusses and 20 cents per lineal foot for piles, and said Crass to furnish all the material; that payments were to be based on the engineer's estimates, and to be made on or about the 15th of each month, or as soon thereafter as the company should pay or cause to be paid said Cross; that 10 per cent. of each estimate should be retained until final completion of the work. It is alleged that complainant fully carried out his part of these two contracts, and earned thereunder $2,561.20; that during the year 1896 the defendant, Crass, paid to him $157, leaving the above-mentioned balance of $2,404.20. It is further alleged that defendant Crass, was the principal contractor on the 30 miles of railroad above mentioned, and that the complainant herein was one of his subcontractors; that Crass had received in full settlement of his work done under the contract about $56,000 in stock and bonds of the Middle Tennessee & Alabama Railroad; that, according to contract, Crass should have paid him in full for his work, but had not done so; that he not only failed to pay complainant, but refused to answer his letters until October, 1896, when he wrote complainant, in answer to an inquiry, that he had sold his claim — that is, Crass' claim, — against the railroad company for $7,500, and endeavored to compel complainant to accept 10 per cent. of the amount of his claim in full settlement; that this was in fact some months after Crass had sold his claim or security for $17,500. Under the facts stated he claims full payment for the amount alleged to be due under the contract. Defendant, Crass, answered, denying that complainant had completed his work; also that he was entitled to $2,561.20; denies that he paid the $157 as a credit, but avers that it was in full, — that it was all that was going to the complainant; that for this sum $157 defendant had mailed complainant a check, which recited on its face that it was in full of complainant's claim; that this was tendered him only as a payment in full; that it was in fact all he was entitled to; that complainant was aware of the recital on its face, and that he indorsed it, and received the money on it. This is pleaded as in full satisfaction of the claim. It is further alleged in defense that under a true construction of the contract the complainant agreed to share with the defendant all loss that should arise by the railroad company's failure to pay defendant for his work, and that, besides this being provided for in the contract, it was so expressly agreed between them orally; that the company did fail, and that defendant was unable to realize full satisfaction of his claim, but only the sum of $7,500 after the payment of all expenses. It is further alleged that he called together all his principal subcontractors except the complainant, and they agreed to this settlement; that complainant was absent in a distant state, and he could not consult him, but that he had ample authority from the complainant to compromise the matter as he might see proper. The matter went to proof, and the chancellor decreed in favor of defendant, dismissing the bill. The complainant has appealed and assigned errors.

It is true that the defendant, Crass, was principal contractor for the construction of the 30 miles of railway above mentioned, and that the complainant was a subcontractor under him. It is furthermore true that the railroad company failed before the work was completed, and that, therefore, the work which the complainant contracted to do was not fully performed, and this was without the fault of either himself or of the defendant, Crass. After the railroad company failed, Mr. Crass, in the interest of himself and all subcontractors, filed attachment bills against the effects of the company, and sought to realize the amount in that way. They were several years in litigation, and finally a reorganization was had, and under this reorganization scheme there was paid to Mr. Crass $25,000 in first mortgage bonds and $26,400 in second mortgage bonds, or, rather, he received a certificate for these bonds. This was the best settlement he could get. He endeavored to dispose of these bonds for several years, and finally disposed of them for $17,500. The expenses were very heavy, amounting in the aggregate to $10,000. After having realized this sum of money, Mr. Crass called together all his principal subcontractors except the complainant, who was in another state, and submitted to them the figures, and they agreed to allow the $10,000 for expenses, and take their pro rata of the $7,500, which was about 10 per cent. of each claim. This settlement was made on the 20th day of April, 1896. Between that date and October, 1896, the complainant wrote a letter to Mr. Crass, calling for a settlement, and thereupon Mr. Crass replied on the 22d of October, 1896, as follows: "Your letter received several days since. Would have answered sooner, but have been very busy. Yes, I have at last sold my claim against the D., C. & N. O. R. R. I only got $7,500 net for all work done on the road. This, of course, is to be prorated to every one who did the work. Before this was accepted, all the largest subcontractors were called together, and signed an agreement to this effect, and have been settled with, which amounts to about 10%. 10% is what they all agreed on rather than go over the work. Will you please send me a copy of Calhoun's estimate of the work (just for the work). The timber has been settled for. This looks like getting nothing, but we all thought that was the best that could be done after waiting all these years, and this was the first chance we ever had to get any money out of it. Crabb has bought since some of the bonds for 10 cts. less on the dollar than he paid me." To this letter complainant replied, as he says in his deposition, "telling him to please send amount due as soon as possible." In reply to this letter Mr. Crass addressed to complainant another letter, dated November, 1896, containing a statement purporting to show the amount of work done on the road by the complainant, fixing the work (leaving out 1,700 lineal feet of piles) at $1,569.96, and inclosed therewith a check for $157. This check, on its face, stated that it was in full. In the letter, also, that Mr. Crass wrote at the time to complainant, he stated that he had inclosed a receipt, which he asked complainant to sign, and also stated that he had not put in 1,700 lineal feet of piles driven for the reason that he had been garnished by one Thompson and others. On receiving this check so stating on its face that it was in full, the complainant, without consulting the defendant on the subject, erased the words "in full," and indorsed the check, and collected it, and thereupon entered a credit upon his account against Mr. Crass. The next thing that occurred was the bringing of this suit on the 31st of March, 1897. The points of difference between the parties are four in number: First, as to whether the defendant is liable to the complainant absolutely, or only upon payment to the defendant by the railroad company; second, as to the true amount of the complainant's account; third, as to whether the complainant authorized Mr. Crass to make settlement for him; fourth, as to whether the complainant is concluded by having received and indorsed the check in the manner stated, and by collecting the money thereon.

As to the first point. We think there can be no doubt that the understanding between the parties was that the money that Mr. Crass expected to pay to his subcontractors was to be realized from the railroad company, and that he would not be liable to the subcontractors, and complainant among the number, unless he could make collection from the railroad company. We think this is the true construction of the contract itself on its face, so far as concerns complainant's claim. In addition to this, Mr. Crass testifies...