Phillips Petroleum Co. v. Rau Const. Co.

• Decision Date: 24 September 1942
• Docket Number: No. 12138.,12138.
• Citation: 130 F.2d 499
• Parties: PHILLIPS PETROLEUM CO. v. RAU CONST. CO.
• Court: U.S. Court of Appeals — Eighth Circuit

130 F.2d 499 (1942)

PHILLIPS PETROLEUM CO. v. RAU CONST. CO.

No. 12138.

Circuit Court of Appeals, Eighth Circuit.

August 19, 1942.

Rehearing Denied September 24, 1942.

William S. Hogsett, of Kansas City, Mo. (John H. Haley and H. H. Booth, both of Kansas City, Mo., on the brief), for appellant.

Maurice J. O'Sullivan, of Kansas City, Mo., for appellee.

Before SANBORN, THOMAS, and RIDDICK, Circuit Judges.

RIDDICK, Circuit Judge.

The appellant and the appellee were parties to a construction contract under which appellee undertook to supply at agreed unit prices the material and labor necessary for approximately 12,000 cubic yards of concrete in place in structures for which the appellant was required to furnish plans as the work progressed. The general character of the structures in which the contractor was to place the concrete was known, but the cubic content and dimensions of none of them had been determined and could not be until the plans for each unit had been completed. After performance of the contract the appellee sued appellant, contending (1) that the contract was void for uncertainty and for want of mutuality and that the appellee was entitled to be compensated for the reasonable value of the labor and material furnished appellant; (2) that the appellee had been induced to execute the contract by fraud and deceit of the appellant to appellee's damage; and (3) that appellant abandoned and breached the contract and thereby caused appellee to sustain damages. A jury having been waived, the district judge, after a hearing, sustained all of the appellee's contentions and entered a judgment in its favor for the full amount claimed.

(1) The district judge based his conclusions on the invalidity of the contract for uncertainty upon the finding that since the parties did not know at the execution of the contract the size and dimensions of the structures to be built, it was impossible that there could have been a meeting of the minds of the contracting parties. But the contract was not one for the construction of any particular structure of any determined size or dimensions. The agreement between the parties was that the contractor would place approximately 12,000 cubic yards of concrete in units for which the appellant was obligated to prepare and furnish plans as the work proceeded. Absolute certainty in contracts of this character is not required. It is sufficient that the contract is definite enough to enable the parties to perform it and to determine when performance has been obtained. Any uncertainty in the present contract was removed as the plans were delivered and the individual units of construction completed. United States v. McMullen, 222 U.S. 460, 472, 32 S.Ct. 128, 56 L.Ed. 269; Pennsylvania R. Co. v. Huston, 6 Cir., 81 F. 2d 704; Cold Blast Transportation Co. v. Kansas City Bolt & Nut Co., 8 Cir., 114 F. 77, 52 C.C.A. 25, 57 L.R.A. 696; Adams v. O'Connor, 6 Ariz. 404, 59 P. 105, 107; Stresenreuter Bros. v. Bowes, 233 Ill.App. 143; Nelson v. Massman Construction Co., 231 Mo.App. 1, 91 S.W.2d 623, 626; Klaber v. Lahar, Mo.Sup., 63 S.W.2d 103; Moran Bolt & Nut Mfg. Co. v. St. Louis Car Co., 210 Mo. 715, 109 S.W. 47; Orpheus Vaudeville Co. v. Clayton Investment Co., 44 Utah 453, 140 P. 653; 9 C. J. 695; 17 C.J.S., Contracts, § 327; 13 C. J. 269; 17 C.J.S., Contracts, § 36.

The contract contained a provision permitting the appellant to suspend the work or to abandon it at its election, and in this provision the court found the contract wanting in mutuality and void. In this the court was in error. Contracts which reserve to one or both parties the unrestricted right of termination are generally held void for want of mutuality. Bendix Home Appliances Co. v. Radio Accessories Co., 8 Cir., 129 F.2d 177. But in the present case, the right of suspension or termination of the contract was not an unrestricted right. Provision was made for compensation of the contractor in the event either of suspension or termination. Moreover, a contract wanting in mutuality or too indefinite to be enforceable at its inception, is binding after performance. Willard, Sutherland & Company v. United States, 262 U.S. 489, 43 S.Ct. 592, 67 L.Ed. 1086; Storm v. United States, 94 U.S. 76, 24 L.Ed. 42; United States Potash Company v. McNutt, 10 Cir., 70 F.2d 126; General Paint Corp. v. Kramer, 10 Cir., 57 F.2d 698; Calkins v. F. W. Woolworth Co., 8 Cir., 27 F.2d 314; Northern Ohio Traction & Light Co. v. Erie Railroad Co., 6 Cir., 8 F.2d 962; Beebe v. Columbia Axle Co., 233 Mo.App. 212, 117 S.W.2d 624; Aden v. Dalton, 341 Mo. 454, 107 S.W.2d 1070; Saginaw Medicine Co. v. Dykes, 210 Mo.App. 399, 238 S.W. 556; Martin v. Ray County Coal Co., 288 Mo. 241, 232 S.W. 149; Williston, Contracts, §§ 47, 106, 1027A.

(2) In the view we take of this case, it is unnecessary to discuss the findings of the trial court upon which is based its conclusion that the appellant was guilty of fraud in inducing the execution and performance of the contract by the appellee. It is enough to say that the claim of fraud was based upon representations which, if made and if false, were nothing except expressions of opinion or expectation given in circumstances which must have identified them as such. An action for damages for deceit cannot be sustained on statements of this character. Roosevelt v. Missouri State Life Ins. Co., 8 Cir., 78 F.2d 752, 757; United States v. Stanolind Crude Oil Co., 10 Cir., 113 F.2d 194; Beatrice Creamery Co. v. Goldman, 175 Okl. 300, 52 P.2d 1033; Grand Lodge v. Massachusetts Bonding & Ins. Co., 324 Mo. 938, 25 S.W.2d 783; Remmers v. Remmers, 217 Mo. 541, 117 S.W. 1117; Hillman v. Graves, Tex.Civ. App., 134 S.W.2d 436; Allison v. Harrison, Tex.Civ.App., 134 S.W.2d 399; Tappe v. Pohlmann, Mo.App., 79 S.W.2d 485; Brown v. South Joplin Lead & Zinc Mining Co., 194 Mo. 681, 92 S.W. 699; McCullough, Inc., v. Doggett, 176 Okl. 8, 54 P.2d 184; Patterson v. Shell Petroleum Corp., Tex.Civ.App., 143 S.W.2d 208. The representations concerned the average content and size of the units into which the 12,000 cubic yards of concrete were to be poured by the contractor. At the time they were made, the contractor knew that the plans for none of the units had been completed. The party to whom the representations were made had before him the contract which the contractor would be required to execute if its bid were accepted and knew that this agreement contained a provision that the contractor must look to the plans as furnished for its determination of quantities, and that the appellant should not be bound by any such representations, expressed or implied, made by any of its employees.

If the appellee had at one time a cause of action against the appellant for damages for deceit, that right was waived by the appellee after the alleged fraud had been discovered. For example, one of the alleged representations upon which the charge of deceit was based was to the effect that ninety percent of the required excavation could be done by machine, whereas the appellee was able to accomplish less than fifty percent of the excavation by use of machinery. But the falsity of this representation, if made, was discovered at the very beginning of operations under the contract. The contractor immediately complained and appellant promptly adjusted the excavation price to conform to the facts. Further, after the work had been in progress for some time, the contract was amended by agreement of the parties, to increase in a very substantial amount the unit prices to be paid the appellee for performance. It is beyond question under the evidence that this amendment to the contract was made at appellee's insistence because of its claims that the work was not as represented in the conversations with appellant's employees, upon which the charge of fraud is founded. The authorities are unanimous in holding that where one has been induced by fraud to enter into a contract and, after discovery of the fraud, enters into an agreement concerning the subject matter of the contract, or demands and receives from the other party any substantial concession in respect to the transaction, he is conclusively deemed to have waived any claim for damages on account of fraud. Josten Mfg. Co. v. Medical Arts Bldg. Co., 8 Cir., 73 F.2d 259; International Harvester Co. v. Rieke, 8 Cir., 9 F.2d 776; Schagun v. Scott Mfg. Co., 8 Cir., 162 F. 209; State ex rel. Cary v. Trimble, Mo.Sup., 43 S.W.2d 1050; Holcomb & H. Mfg. Co. v. Jones, 102 Okl. 175, 228 P. 968; Minneapolis-Moline Co. v. Gatzki, Tex.Civ.App., 57 S.W.2d 593; Thompson v. Pitts, Tex.Civ.App., 2 S.W.2d 899. The rule has been held to apply...