Fraudulent Johnston v. Pump Co. Dowling testifies that he did not tell Powers not to issue the certificate. Nor do highwaymen come into court and admit that they either jointly or severally committed the act. Fraud in fact is not usually proved by the direct admissions of the parties thereto, but usually by circumstances which overcome the express denials of fraudulent conduct. Let us see the surroundings of this case. When I say this, I mean, let us read the real record. Up to May 31st there had been no complaint about this work. This is the day, according to Dowling, that he was in the architect's office, when Johnston came in with the May estimate. This estimate was given to the architect and was put in evidence by defendant with the pencil changes thereon, which showed that the parties got together on the sum of $9000. This architect had been in the building from one and one-half to two hours each morning and evening (three to four hours each day) during the whole time. He saw the walls go up from foundation to the coping of the fire walls. The building was to the point of putting on the roof. Not a complaint had been made. It would appear that after Dowling told Powers that he would not pay the certificate if issued, and on May 31st, Powers wrote a letter complaining about the mortar used in fire walls, chimneys, stack and pent house, and these changes could have been made for $40 to $50. Part of this the subcontractor offered to do without charge. This was the first step after the architect judicially determined not to issue the certificate because Dowling said that he would not pay it. The big stride was not taken until June 2nd, when the architect suddenly discovers that all the brick walls in the second and third stories of the building had not been placed with mortar in accordance with the contract, and he directed that this be remedied within three days. Don't forget at this point that this architect had been on this building three to four hours each day whilst these walls were going up. Don't forget that the men say he saw the mortar mixed, and he does not deny it. On the Johnston v. Pump Co. 6th, he concludes that $500 should be allowed the owner for this alleged defective mortar. Just a small bite of pie for his employer and paymaster. But this is not all. From pages 57 to 140 appears plaintiff's evidence in chief and 195 to 209 is plaintiff's rebuttal. From pages 140 to 194 is defendant's evidence and exhibits. Including the plaintiff 36 witnesses testified for the plaintiff. Many of them had worked on the building and others furnished materials. This evidence overwhelmingly shows a substantial compliance with the contract in every particular, and the ordering out of two stories of this building on the facts in this case. was an arbitrary ruling by this architect and evidently made to force a rebate in contract price in favor of his employer and paymaster. The evidence for defendant consisted of two brick and mortar experts, two carpenters, Powers (the hired man of defendant), the counsel for defendant, and the three Dowlings, the officers of defendant. Don't forget these walls, second and third stories, built by plaintiff are in the building as afterward completed by defendant. So viewing this case as one in chancery, I conclude (1) that the evidence clearly shows a breach of contract by defendant and (2) the fraudulent conduct of the architect. Pleading: Meruit: V. With the breach of the contract upon defendant's part practically all of the things pleaded in its answer fall out of the case. Not only so, but the applicable law is thereby changed. If defendant breached the contract he can claim no payments to subcontractors (under his present pleadings), because even in equity we do not go beyond the pleadings for the issues. If the defendant chose to rest his whole defense upon a contract which both he and his architect deliberately breached, he is not in a very presentable shape for a court of conscience. The trial court allowed him some payments which that court Contractor: Johnston v. Pump Co. concluded had been made by direction of plaintiff. There was a plea of payment, and under this second clause of the answer, the court was right in charging those items against the plaintiff. This on the theory that payments directed by plaintiff were the same as payments to plaintiff. But this is as far as the court could have gone. When it appears that defendant breached the contract (as it does appear), then all of defendant's answer falls out of the case except the first two short paragraphs thereof, which contain (1) some admissions and a general denial, and (2) a plea of payment. All the remainder of the answer is bottomed upon the contract, which, upon defendant's proven breach, falls clear out of this, an action in quantum meruit. But it is urged that plaintiff on the proof made would be recovering in excess of his contract. Defendant urges that the plaintiff procured the material and labor at a less price than the proof shows the reasonable value to be, and therefore should not be entitled to more than he paid out, in this action. To illustrate: Ryan contracted the excavation work at $2600, and then did $100 if extra work. He was paid $2700. He testified that the work he did was reasonably worth $3275, and that he lost $500 to $600 on the job. Other testimony is to like effect. This brings us to what is the measure of recovery in cases of this kind. In Missouri we have two classes of cases in quantum meruit growing out of violated building contracts: (1) cases where the contractor has breached his contract, and the owner has taken over and used the material and labor furnished by the contractor, and (2) where the owner has breached the contract, and the plaintiff has elected to sue in quantum meruit rather than upon the contract. There has been some loose writing in the Missouri cases as to the measure of recovery in these two classes of cases, but in Division One I have set out what I now assert to be the true rule in a case where the owner has breached the contract. In the Division case, Bradley Heating Co. v. Sayman Realty and Investment Johnston v. Pump Co. Co., 201 S. W. 864, 1. c. 866, I did not pass upon the question, because not necessarily involved therein, but I did collate the authorities stating what I deem the rule. In that case I said: "Thus in McCullough v. Baker et al., 47 Mo. 1. c. 402-3, it is said: 'The suit is not founded upon the contract. The plaintiff waives that and sues upon the quantum meruit. If he is entitled to recover at all he is entitled to recover a reasonable compensation for the work actually done. That is the rule where the contractor is prevented from completing his job by the unwarranted acts and defaults of the other party. In such a case he is not restricted to a pro rata share of the contract price. He may either sue upon the contract and claim damages for a breach of it, or he may, as in this case, waive the contract and sue for the reasonable value of his work.' "In Ehrlich v. Life Insurance Co., 88 Mo. 1. c. 257, BLACK, J., said: 'So a contractor, who has been prevented from completing his job, may waive the action for damages and sue for the value of the work done and materials furnished, and he is not in such case restricted to a pro rata share of the contract price. [McCullough v. Baker, 47 Mo. 401; Mitchell v. Scott et al., 41 Mich. 108; Fitzgerald v. Allen et al., 128 Mass. 234.]' "With a preciseness characteristic of the man, ROMBAUER, P. J., in Kelly v. Rowane, 33 Mo. App. 1. c. 443, thus summarizes the law: "The law governing the rights of parties to building contracts in this State, although peculiar, is well settled. If a contractor is prevented by the unauthorized act of the owner from completing a building contract, he may recover in an action the reasonable value of his work and labor, regardless of the contract price, and is not restricted to a pro-rata share of the contract price. [McCullough v. Baker, 47 Mo. 401; Ahern v. Boyce, 19 Mo. App. 552.] On the other hand, if he voluntarily abandons the contract, he may recover the actual value of the work and ma Johnston v. Pump Co. terials, not exceeding the contract price, less such damages as have resulted to the other contracting party, from the breach of the contract. [Yeats v. Ballentine, 56 Mo. 530; Eyerman v. Mt. Sinai Cemetery Assn., 61 Mo. 489; Davis v. Brown, 67 Mo. 313.] Under the issues made by the informal pleadings of the parties, and the evidence adduced in support, the case in its nature was to be governed by one or the other of these propositions. If the plaintiff was prevented by the unauthorized act of the defendant his contract, his rights and extent of recovery were governed by the first class of cases above cited; if he voluntarily abandoned it, by the latter.' "This rule is further recognized to the fullest in Eyerman v. Cemetery Assn., 61 Mo. 489; Davis v. Brown, 67 Mo. 313; Car Co. v. Kast, 171 Mo. App. 1. c. 311-12; Cann v. Rector, etc., 111 Mo. App. 1. c. 182; Dempsey v. Lawson, 76 Mo. App. 1. c. 526; Smith v. Coal Co., 36 Mo. App. 1. c. 580." That we have cases which say the plaintiff (contractor) who has not breached his contract, suing in quantum meruit an owner who has breached his contract, cannot recover in excess of the contract rate, there is no doubt, but to my mind these cases overlook the real distinction. Where the contractor breached the contract, and then sues for material and labor in quantum meruit, it is proper to limit his recovery so as to keep the finished structure within the contract price. This, because his breach of the contract does not destroy the owner's rights under the contract. By breaching the contract he cannot take from the owner the rights reserved in the contract, but the owner in the quantum meruit action can at least assert the contract to the extent of fixing values and damages. The rule of a case where the contractor has breached the contract is well expressed in Eyerman v. Mt. Sinai Cemetery Association, 61 Mo. 1. c. 491: "The established rule extracted and deduced from all the cases is, that where a party fails to perform his work according to the stipulations 274 Sup. 29. |