King v. Duluth, Missabe & Northern Railway Company
| Citation | 63 N.W. 1105,61 Minn. 482 |
| Decision Date | 28 June 1895 |
| Docket Number | 9273--(167) |
| Parties | GEORGE R. KING v. DULUTH, MISSABE & NORTHERN RAILWAY COMPANY |
| Court | Supreme Court of Minnesota (US) |
Appeal by defendant from an order of the district court for St Louis county, Ensign, J., overruling a demurrer to both causes of action in the complaint. Reversed as to the first cause of action. Affirmed as to the second cause of action.
Joseph B. Cotton and Geo. Welwood Murray, for appellant.
Appellant was entitled to insist on respondent's performance of the contract, and a promise to pay him additional compensation for such performance is without consideration. Ayers v Chicago, R. I. & P. R. Co., 52 Iowa 478, 3 N.W. 522; McCarty v. Hampton B. Assn., 61 Iowa 287, 16 N.W 114; Festerman v. Parker, 10 Ired. Law, 474; Hasbrouck v. Winkler, 48 N. J. Law, 431, 6 A. 22; Lingenfelder v. Wainwright B. Co., 103 Mo. 578, 15 S.W. 844; Conover v. Stillwell, 34 N. J. Law, 54; Reynolds v. Nugent, 25 Ind. 328; Vanderbilt v Schreyer, 91 N.Y. 392; Pollock, Cont. 176 (161); Crosby v. Wood, 6 N.Y. 369; Deacon v. Gridley, 15 C. B. 295; 1 Parsons, Cont. 437; Bartlett v. Wyman, 14 Johns. 260; Harris v. Carter, 3 El. & Bl. 559; Stilk v. Myrick, 2 Camp. 317; Mallalieu v. Hodgson, 16 Q. B. 689; Smithett v. Blythe, 1 Barn. & Adol. 509; Lattimore v. Harsen, 14 Johns. 330; Robinson v. Jewett, 116 N.Y. 40, 22 N.E. 224. The same principle applies to both causes of action.
J. L. Washburn and L. E. Judson, Jr., for respondent.
Where, owing to unexpected difficulties a contract becomes oppressive, the parties may substitute a new contract based on the equity and justice of the case; and in such case a promise of additional compensation is not invalid for want of consideration. Foley v. Storrie, 4 Tex. Civ. App. 377, 23 S.W. 442; Dillon, Mun. Corp. § 477 (398); Galveston v. Galveston C. R. Co., 46 Tex. 435; Bean v. Inhabitants of Jay, 23 Me. 117; Bishop, Cont. § 768; Lattimore v. Harsen, 14 Johns. 330; Hart v. Lauman, 29 Barb. 410; Keeney v. Mason, 49 Barb. 254; Meech v. City of Buffalo, 29 N.Y. 198; Stewart v. Keteltas, 36 N.Y. 388. The consideration for the substitution of a new contract is the abandonment, waiver or rescission of the old. Munroe v. Perkins, 9 Pick. 298; Rollins v. Marsh, 128 Mass. 116; Bryant v. Lord, 19 Minn. 342 (396); Coyner v. Lynde, 10 Ind. 282; Lawrence v. Davey, 28 Vt. 264; Cooke v. Murphy, 70 Ill. 96; Bishop v. Busse, 69 Ill. 403; Moore v. Detroit L. Works, 14 Mich. 266; Goebel v. Linn, 47 Mich. 489, 11 N.W. 284. The work having been performed under the new contract, and having been accepted by defendant, it is estopped to question the validity of the new contract. Maxwell v. Graves, 59 Iowa 613, 13 N.W. 758; Keeney v. Mason, supra; Lawrence v. Davey, supra; Moore v. Detroit L. Works, supra; Rickey v. Morrison, 69 Mich. 139, 37 N.W. 56.
*T, C. J. [2]
This is an action brought by the plaintiff, as surviving partner of the firm of Wolf & King, to recover a balance claimed to be due for the construction of a portion of the defendant's line of railway. The complaint alleges two supposed causes of action, to each of which the defendant demurred on the ground that neither states facts constituting a cause of action. From an order overruling the demurrer the defendant appealed.
1. The complaint for a first cause of action alleges, among other things, substantially, that in January, 1893, the firm of Wolf & King entered into three written contracts with the president and representative of the defendant for the grading, clearing, grubbing, and construction of the roadbed of its railway for a certain stipulated price for each of the general items of work and labor to be performed; that the firm entered upon the performance of such contracts, but in the latter part of February, 1893, in the course of such performance, unforeseen difficulties of construction involving unexpected expenses, and such as were not anticipated by the parties to the contracts, were encountered. That the firm of Wolf & King found that by reason of such difficulties it would be impossible to complete the contracts within the time agreed upon without employing an additional and an unusual force of men and means, and at a loss of not less than $ 40,000 to them, and consequently they notified the representative of the defendant that they would be unable to go forward with the contracts, and unable to complete or prosecute the work. Thereupon such representative entered into an agreement with them modifying the written contracts, whereby he agreed that if they would "go forward and prosecute the said work of construction, and complete said contract," he would pay or cause to be paid to them an additional consideration therefor, up to the full extent of the cost of the work, so that they should not be compelled to do the work at a loss to themselves; that in consideration of such promise they agreed to forward the work rapidly, and force the same to completion, in the manner provided in the specifications for such work, and referred to in such contracts. That in reliance upon the agreement modifying the former contracts, and in reliance upon such former contracts, they did prosecute and complete the work in accordance with the contracts as so modified by the oral agreement, to the satisfaction of all parties in interest. That such contracts and the oral contract modifying them were duly ratified by the defendant, and that the actual cost of such construction was not less than $ 30,000 in excess of the stipulated amount provided for in the original written contracts.
It is claimed by appellant that the complaint shows no consideration for the alleged promise to pay extra compensation for the work; that it is at best simply a promise to pay the contractors an additional compensation if they would do that which they were already legally bound to do. The general rule is that a promise of a party to a contract to do, or the doing of, that which he is already under a legal obligation to do by the terms of the contract is not a valid consideration to support the promise of the other party to pay an additional compensation for such performance. 1 Chitty, Cont. 60; Pollock, Cont. 176 (161); Leake, Cont. 621. In other words, a promise by one party to a subsisting contract to the opposite party to prevent a breach of the contract on his part is without consideration. The following cases sustain and illustrate the practical application of the rule. Ayers v. Chicago, R. I. & P. R. Co., 52 Iowa 478, 3 N.W. 522; McCarty v. Hampton B. Ass'n, 61 Iowa 287, 16 N.W. 114; Lingenfelder v. Wainwright B. Co., 103 Mo. 578, 15 S.W. 844; Vanderbilt v. Schreyer, 91 N.Y. 392; Reynolds v. Nugent, 25 Ind. 328; Robinson v. Jewett, 116 N.Y. 40, 22 N.E. 224; Wimer v. Worth Tp., 104 Pa. 317.
If the allegations of the complaint, when taken together, are in legal effect simply that the contractors, finding by the test of experience in the prosecution of the work that they had agreed to do that which involved a greater expenditure of money than they calculated upon, that they had made a losing contract, and thereupon notified the opposite party that they were unable to proceed with the work, and he promised them extra compensation if they would perform their contract, the case is within the rule stated, and the demurrer ought to have been sustained as to the first cause of action.
It is claimed, however, by the respondent, that such is not the proper construction of the complaint, and that its allegations bring the case within the rule adopted in several states, and at least approved in our own, to the effect that if one party to a contract refuses to perform his part of it unless promised some further pay or benefit than the contract provides, and such promise is made by the other party, it is supported by a valid consideration, for the making of the new promise shows a rescission of the original contract and the substitution of another. In other words, that the party, by refusing to perform his contract, thereby subjects himself to an action for damages, and the opposite party has his election to bring an action for the recovery of such damages or to accede to the demands of his adversary and make the promise; and if he does so it is a relinquishment of the original contract and the substitution of a new one. Munroe v. Perkins, 9 Pick. 298; Bryant v. Lord, 19 Minn. 342 (396); Moore v. Detroit L. Works, 14 Mich. 266; Goebel v. Linn, 47 Mich. 489, 11 N.W. 284; Rogers v. Rogers, 139 Mass. 440, 1 N.E. 122.
The doctrine of these cases as it is frequently applied does not commend itself either to our judgment or our sense of justice, for where the refusal to perform and the promise to pay extra compensation for performance of the contract are one transaction, and there are no exceptional circumstances making it equitable that an increased compensation should be demanded and paid, no amount of astute reasoning can change the plain fact that the party who refuses to perform, and thereby coerces a promise from the other party to the contract to pay him an increased compensation for doing that which he is legally bound to do, takes an unjustifiable advantage of the necessities of the other party. To hold, under such circumstances, that the party making the promise for extra compensation is presumed to have voluntarily elected to relinquish and abandon all of his rights under the original contract, and to substitute therefor the new or modified agreement, is to wholly disregard the natural inference to be drawn from the transaction, and invite parties to repudiate their contract obligations whenever they can gain thereby.
There can be no legal presumption that such a transaction is a voluntary rescission or modification of the original contract, for the...
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