Krause v. Bd. of Trustees of Sch. Town of Crothersville

• Decision Date: 09 March 1904
• Citation: 70 N.E. 264,162 Ind. 278
• Parties: KRAUSE et al. v. BOARD OF TRUSTEES OF SCHOOL TOWN OF CROTHERSVILLE.
• Court: Indiana Supreme Court

162 Ind. 278

70 N.E. 264

KRAUSE et al.

v.BOARD OF TRUSTEES OF SCHOOL TOWN OF CROTHERSVILLE.

Supreme Court of Indiana.

March 9, 1904.

Appeal from Circuit Court, Bartholomew County; F. T. Hord, Judge.

Action by the board of school trustees of the school town of Crothersville against John Krause and others. From a judgment for plaintiff, defendants appeal. Transferred from the Appellate Court under Burns' Rev. St. 1901, § 1337j, subd. 2. Reversed.

Oscar Montgomery, Marshall Hacker, and W. T. Brannaman, for appellants. Stansifer & Baker and S. A. Barnes, for appellee.

GILLETT, C. J.

This suit was instituted by appellee to recover on a bond executed by appellants for the faithful performance of a building contract. Certain of the appellants, constituting the firm of John Krause & Co., filed a cross-complaint to recover for a balance unpaid under the contract, and to this they added a paragraph on a quantum meruit. Issues were joined on the pleadings mentioned, and a trial resulted in a judgment in favor of appellee upon its complaint, and against said cross-complainants, on the issues tendered by them. Pursuant to request, the court found the facts specially. The findings are very long, and in the statement of the facts so found we shall not only summarize many of the findings, but shall omit matters which, for the purposes of this opinion, are irrelevant.

In October, 1898, appellee entered into a contract in writing with said John Krause & Co., whereby the latter agreed to furnish the materials for, and to erect and finish, an annex to a school building belonging to appellee, and to make certain improvements upon the latter building, for the sum of $3,853.35, “to be paid upon the completion of the work.” Appellee agreed in said contract, in consideration of the agreements of said firm being strictly kept, that it would pay said sum to said firm, but provision was made in said instrument that, as the work progressed, estimates were to be furnished by the architect of materials provided and labor performed, on which 80 per cent. of the value of said material and labor would be paid on the presentation of said estimates, the amount so paid to be deducted from the final estimate which the contract provided for. The fifth subdivision of said contract was as follows: “The party of the first part [the school town] shall not be in any manner answerable, accountable or responsible for any loss or damage that shall or may happen to said work or any part thereof, or for any of the materials or anything used or employed in finishing the same.” Appellee reserved the right in said contract to place in position the heating apparatus and furniture at such times as it saw fit. The specifications attached to the contract provided that all the work, when finished, was to be turned over perfect, complete, and undamaged in every particular; that the whole work was to be inspected as it went on, and was to be accepted by the owner and architect before a final settlement was made. The character of the bond is indicated above. The building to which said annex was to be attached was a two-story brick structure, and the annex was of the same height. For a distance of 42 feet the west wall of the old building was to be the east wall of the new structure. The annex was to be so compactly and substantially joined to the old building as to constitute one building. One end of the lower sill or cord of the roof trusses was required to rest on said old wall, and the roof plates of the new building were to be fastened to the roof plates of the other building. The halls of the two buildings were to be arranged so that they would be continuous. Krause & Co. were also required under their contract to do considerable work on the old building, such as excavating, putting in underpinning, building a concrete floor, raising the tower, and doing the mason work in connection with the installing of the heating apparatus. On July 24, 1899, said firm had progressed with its work until it would have cost but $35 to complete the same, there being but one coat of paint and of varnish necessary to finish such undertaking; the value of the work done and materials furnished at that time, the court found to be but $35 less than the contract price. On the day aforesaid the old building was struck by lightning and thereby set fire to, and everything inflammable in both buildings was destroyed by such fire. As a result of the fire said common wall partially fell, and was so weakened that it had to be taken down. The remaining walls of the old building were also seriously injured. The court found that all that could have been done upon the old building after the fire, under said contract, was to build up the retaining walls in the furnace rooms to the floor line. It was further found that it would have been impossible for said contractors to build the roof of the annex, as provided for in the contract, without said common wall, and that without it the remainder of said structure, if built, would have been weak. With the exception of a few days' work done by two men during the week before the fire, no work had been done by said firm on said contract, according to the findings, after May 26, 1899. The court found that said firm could have completed its contract by June 15, 1899, and that it unreasonably and without excuse delayed the completion of said work. It is shown that appellee had advanced to said firm, prior to said fire, approximately 80 per cent. of the contract price. No estimates had been made or demanded. The concluding findings of the court show that after the fire appellee requested said firm to complete its contract; that the firm refused to do so, for the assigned reason that the old building was not in such condition as to make suck work possible; that appellee then offered to restore the old building, so that the firm might complete its contract, but that the firm refused to agree to do so; that appellee then demanded that said firm pay back the money advanced on the work, which demand was refused.

The questions involved in this case are in many respects quite novel, at least so far as this court is concerned. The ancient case of Paradine v. Jane, Aleyn 26, is often referred to in the discussion of the question as to whether a covenant will be discharged by a subsequent event, happening without the default of the covenantor, which renders performance impossible. That case was an action of debt to recover rent. The defendant answered that he had been dispossessed by an alien army, which had occupied the premises until after the lease expired. There was no answer as to one quarter. The court said: “Where the law creates a duty or charge, and the party is disabled to perform it without any default in him, there the law will excuse him; *** but where the party by his own contract creates a duty or charge upon himself, he is bound to make it good, notwithstanding any accident by inevitable necessity, because he might have provided against it by his contract.” It will be seen that that case did not involve a question as to a covenant which it had become impossible to perform, since the defendant could pay rent, mode et forma as he had covenanted, notwithstanding the eviction. We regard it as thoroughly settled that the words of a mere general covenant will not be construed as an undertaking to answer for a subsequent event, happening without the fault of the covenantor, which renders performance of the covenant itself not merely difficult or relatively impossible, but absolutely impossible, owing to the act of God, the act of the law, or the loss or destruction of the subject-matter of the contract. Where performance is thus rendered impossible, the inquiry naturally arises as to whether there was a purpose to covenant against such an extraordinary and therefore presumably unapprehended event, the happening of which it was not within the power of the covenantor to prevent. The tempest, for instance, may destroy that which must exist if performance of the covenant is to remain possible, and it would seem evident in such a case that it was not within the contemplation of the parties that the maker of the covenant should answer in damages for what he could in no wise control. But, on the other hand, a person entering into a charter party might be answerable for delay caused by adverse winds, since it would be presumed that the parties contracted with such a possibility in mind. Shubrick v. Salmond, 3 Burr. 1637. A well-known English writer on the law of contracts says: “By the modern understanding of the law, we are not bound to seek for a general definition of ‘the act of God’ or vis major, but only to ascertain what kind of events were within the contemplation of the parties;” and he further says upon the same point: “We cannot arrive, then, at any more distinct conception than this: An event which, as between the parties and for the purpose of the matter in hand, cannot be definitely foreseen or controlled. In other words, we are thrown back upon the nature and construction of the particular contract.” Pollock, Prin. of Contracts, 262. In Hayes v. Bickerstaff, Vaugh. 118, 122, it was declared “that a man's covenant shall not be strained so as to be unreasonable, or that it was improbable to be so intended, without necessary words to make it such, for it is unreasonable to suppose a man should covenant against the tortious acts of strangers, impossible for him to prevent, or, probably, to attempt preventing.”

The leading case upon the subject of subsequent events rendering performance of covenants impossible is Baily v. Crespigny, 4 Q. B. L. R. 180. In that case a lessor had covenanted that neither he nor his heirs or assigns would allow any building on a piece of land of the lessor's fronting the demised premises. A railway company purchased this land under the compulsory powers of a subsequent act of Parliament, and erected a station...