Assignment. Release. Contract, Performance and breach, Building contracts, Implied in law. Order.
In an action on an order in writing payable to the plaintiff drawn upon the defendant by a contractor who was engaged in constructing a building on the defendant's land, it appeared that the order was payable from any amount due to the contractor on the final payment under his contract with the defendant, and that this order was accepted in writing by the defendant before the completion of the work under the contract. There was evidence on which it could have been found that afterwards the contractor fully performed his contract, or that his work, although differing in some unimportant particulars from the specifications of the contract, was accepted by the defendant as a complete performance of it. It further appeared that, when the building could have been found to have been completed and the time for the final payment had arrived, the defendant owed the contractor a sum of money more than sufficient to satisfy the plaintiff's order, and that thereupon the contractor and the defendant made a settlement, by which the contractor released the defendant from all liability to him, and accepted in return a payment of $100 and a promise of the defendant to assume and pay all bills of persons having liens upon the building. Held, that the case was for the jury, and that, upon the jury finding that the contractor had performed his contract and was entitled to a final payment more than sufficient to cover the amount of the plaintiff's order or assignment accepted by the defendant, the plaintiff was entitled to recover that amount in full, the subsequent release by the contractor, to which the plaintiff was not a party, having no effect to discharge or revoke the assignment of the fund to the plaintiff, and the defendant having no right, after his acceptance of the order, to reduce the amount coming to the plaintiff out of the final payment, by diverting the fund to the payment of liens which he had agreed to assume and discharge for his own benefit.
In an action against a landowner on an order in writing, drawn by a contractor and accepted by the defendant as payable "from any amount due" the contractor "on final payment" under a contract for the construction of a building, if it appears that the contractor in good faith has performed his contract in substance, and, although there have been some unessential variations from the letter of the contract, he would be entitled to recover from the landowner on a quantum meruit the value of his work and materials to an amount not exceeding the contract price reduced by the amount of damage suffered by the landowner on account of the contractor's departure from a strict performance, the plaintiff as the holder of the order can recover this amount.
BRALEY, J.
The order and its acceptance, while improperly declared on as an inland bill of exchange, has been treated throughout by the parties and the trial judge as the written promise of the defendant to pay the amount named to the plaintiff from the final payment due to the drawer under a building contract in process of performance. Wells v. Brigham, 6 Cush. 6. R.L.c. 73, §§ 143, 146. But, no question of pleading having been raised, we consider the case as presented.
If the acceptance of the order in the name of the defendant by the architect was unauthorized, there was ample evidence of ratification for the consideration of the jury, to whom this question was rightly submitted. Lawrence v. Lewis, 133 Mass. 561.
The validity of the defendant's signature being established, acceptance had been proved, and, subject to the provisions of the contract, the accepted order operated as an assignment for the plaintiff's benefit of so much of the final payment as might be necessary to satisfy the amount for which it was drawn. By the assignment and the promise of the defendant, his liability to Foster, the original debtor, was discharged for the amount, and this furnished a sufficient consideration for the promise. Burrows v. Glover, 106 Mass. 324, 325. Griffin v. Cunningham, 183 Mass. 505.
But, although the plaintiff could sue in its own name, it was required to show a compliance with the precedent conditions upon which the final payment depended, as the assignor, with whose remedial rights the plaintiff is clothed, could not recover under the contract, without proof that it had been performed. Gillis v. Cobe, 177 Mass. 584. Allen v. Mayers, 184 Mass. 486. Burke v. Coyne, 188 Mass. 401. Corsiglia v. Burnham, 189 Mass. 347. Upon this question the evidence was conflicting. The erection of the building was under the supervision of an architect by whom earlier payments had been approved, and who could have been found to have been fully conversant with all of the details of construction as the work progressed. If the contractor whom the plaintiff called as a witness was believed, the jury could find that neither the defendant, who lived next door and was familiar with the general character of the work, nor the architect, during the six months in which the building was under construction, made any objection to the quality of the materials used or the character of the work until it had been substantially finished and the defendant had entered into occupation. A list then was furnished, containing twenty-six particulars in which the architect said that the work did not conform to the specifications. In his evidence the witness, while asserting that in every particular he had performed the contract, took up these items separately and gave a full explanation as to each and said that, after a full examination of all the matters complained of, he had completed them as requested, except that he had refused to change the "store fronts," which he insisted were finished properly. He also said that he made every reasonable effort to perform the contract, and believed that there had been a full compliance with the specifications. In the specifications "all doors and windows in stores" were to be finished on the interior with moulded casings. These were put on, and, even if the defendant maintained that the mouldings should have been plain because they were so shown by a detailed drawing supplied by the architect, there is no clause in the contract providing that such drawings shall control the specifications, with which the contractor had complied. It was not until the trial that the defendant further said that the front wall was not plumb within an inch or half an inch, and this the plaintiff conceded. But upon this matter the contractor further testified, that the wall could not be plumb because it was built to conform with the front wall of the defendant's adjoining building with which it fully corresponded.
While acceptance may be express, or implied from the conduct of the owner or his agent, yet mere occupancy, or part payment, and nothing further, unless the contract so provides, do not of themselves warrant an inference of the acceptance of work, where defects are complained of, but they may be considered in connection with other facts, where satisfactory performance of a building contract is in issue. The question is one of fact. It was open for the jury to say upon all the evidence, that all of the various details of defective workmanship set forth in the notice had been remedied wherever there had been a departure from the specifications, and, from the conduct of the architect and the defendant in remaining silent when they could have been found to have known of it, coupled with the fact that the front wall of the new building was apparently intended to correspond with the defendant's adjoining estate, that as finally finished the building had been accepted as having been fully completed. Gray v. James, 128 Mass. 110. Beharrell v. Quimby, 162 Mass. 571. Gillis v. Cobe, 177 Mass. 584.
It is true that both the architect and the defendant gave evidence of a failure of performance in important matters which had not been remedied. The jury, however, were not required to accept their testimony and to reject that of the contractor, and, if they found that the contract had been performed, the last instalment of the contract price had been earned. Olmstead v. Beale, 19 Pick. 528. Wiley v. Athol, 150 Mass. 426, 435. Allen v. Mayers, 184 Mass. 486. But, if earned, it was not payable if there were outstanding mechanic's liens at the date of the plaintiff's writ, for which security must be given as called for by the contract. That such liens were in existence the plaintiff admitted, but upon uncontroverted evidence, the effect of which was left to the jury under suitable instructions, it could have been found that the defendant on October 12, 1903, had obtained from Foster a release of all claims and demands, the actual consideration for which besides the receipt of $100 in money included the payment by the defendant of the liens. By this transaction the release operated as a satisfaction of the performance of this condition, even if the amount paid to the releasor was only a very small part of what he claimed to be coming to him. But, the release to which it was not a party did not discharge or revoke the plaintiff's assignment of the fund, and the defendant could not use the plaintiff's money in payment of liens, which he himself had agreed to assume and discharge for his own benefit by way of a settlement with the builder. There had been no abandonment or cancellation of the contract as in Linnehan v. Matthews, 149 Mass. 29, and in Glidden v. Massachusetts Hospital Life Ins. Co. 187 Mass. 538, but only a settlement with Foster who was claiming under it as having been fully performed. The defendant, having accepted the order, could not reduce the amount coming to the plaintiff out of the final payment by charging against it directly or indirectly orders afterwards accepted or the money paid for the release. The order, followed by acceptance, was for part of a particular fund, and bound the fund in the defendant's hands as against the subsequent claims of attaching or other creditors of Foster. Dennis v. Twitchell, 10 Met. 180. Kingman v. Perkins, 105 Mass. 111. Hall v. Dorchester Ins. Co. 111 Mass. 53. St. John v. Charles, 105 Mass. 262. Burrows v. Glover, 106 Mass. 324. Brill v. Tuttle, 81 N.Y. 454, 457. Walker v. Rostron, 9 M. W. 411. Besides, as between themselves, Foster and the defendant, so long as the contract remained in force, could not by anticipation reduce the final payment below the plaintiff's interest through over payments of preceding installments. Eastman v. Wright, 6 Pick. 316, 322. Sanders v. Soutter, 136 N.Y. 97. Todd v. Meding, 11 Dick. 83. If these orders, the amount of the liens at their face value and the payment for the release were not taken out, there was no dispute but there would be more than enough remaining of the final payment to satisfy the plaintiff's demand.
But, while the defendant's requests so far as they were not given were properly refused, in instructing the jury upon the question raised by the fourteenth request, after having said that there could be no recovery unless the contract was performed according to its terms or the defendant had accepted the building as it stood, the judge went further, and said, that, if in good faith there had been a substantial performance, the plaintiff could recover the balance due to the amount of the assignment, less any trifling deductions required to complete the work. The defendant, having pleaded the contract, was protected by its terms by which the plaintiff also became bound. If there had been some immaterial variations so that recovery under the strict letter of the contract could not be had, yet the contract had not been abrogated; and the measure of the defendant's liability for labor and materials under the rule in Hayward v. Leonard, 7 Pick. 181, continued to be the contract price. Blood v. Wilson, 141 Mass. 25. Burke v. Coyne, 188 Mass. 401.
The accepted order, as we have said, was a partial and effective appropriation of a recognized debt or fund, namely, the amount which might be found finally due to Foster, and the plaintiff's right of priority still attached whatever the form of procedure. Bourne v. Cabot, 3 Met. 305. Kendall v. United States, 7 Wall. 113.
The defendant's exceptions to the charge therefore were not well taken, and, there having been no error of law at the trial, the order must be,
Exceptions overruled.