Phillips & Colby Construction Company v. Seymour
91 U.S. 646 (1875)

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U.S. Supreme Court

Phillips & Colby Construction Company v. Seymour, 91 U.S. 646 (1875)

Phillips & Colby Construction Company v. Seymour

91 U.S. 646

Syllabus

1. A., who had undertaken to build a railroad for a company, entered July 18, 1872, into a sealed contract with B. for building a hundred and sixty miles of the road. The contract, among other things, provided that B. should complete the first section, of forty miles, on or before the first day of September then next ensuing; the third section, of twenty miles, by the fifteenth day of that month; the fourth section, of twenty miles, on the fifteenth day of the following November; the fifth section, of twenty miles, on the fifteenth day of December, and so on, the whole to be completed May 1, 1873. Payment was to be made to B. as the work progressed, the 15th of each month, on monthly estimates, by the engineer of the railroad company, of the work done the previous month, except fifteen percent after the completion of forty miles, which was to be retained as security for the performance by B. until the work should be completed, and to be forfeited to A., and applied to any claim for damages which he might sustain by the failure of B. to have the stipulated work completed at the time specified. Fifteen percent of the estimates on the first forty miles, and a liquidated sum of $15,000 agreed to be paid for extra work on that section, were to be retained as security for the completion of the first sixty miles. B. failed to finish any portions of the work by the specified time, but A., although authorized by the contract to declare it forfeited, excused the failure, paid B. the estimate for the work then done, and permitted him to proceed with the work. B. continued to do so until A. failed to pay the large sums due him by the estimates for work done in October and November. B. then learned from A. that the latter was unable to pay those estimates, and would probably be unable for a time to pay future monthly estimates. B. thereupon ceased to do any further work and brought this suit. Held: 1. that the declaration of B. was sufficient on demurrer, as it averred, in substance, that from the time he entered upon tie performance of the contract in July, 1872, until the fifteenth day of December of that year, when A. wholly failed to make the stipulated payment for tire work then actually done, he, with a large force and with suitable equipments along the whole line of the road, had prosecuted the work with all the energy and skill that be possessed, and that A. had expressed satisfaction at the manner in which the work was done; 2. that A. so far waived absolute performance on the part of B. as to consent to be liable on his covenant for the contract price of the completed work, but did not waive his right to whatever damages he may have sustained by the failure of B. to perform

Page 91 U. S. 647

such work by the specified time, and that A. might set up such damages by way of cross-demand against B; 3. the court below erred in charging the jury that time was not of the essence of the contract sued on, and that such damages could not, therefore, be recovered, but, inasmuch as there was no legal evidence of such damages, the misdirection of the court worked no prejudice to A., and affords no ground for reversing the judgment; 4. that B. was not required, after A. had defaulted on a payment due, to proceed with the work at the hazard of further loss, and that he was entitled to recover the contract price of the work done, together with the fifteen percent on the estimates, and the $15,000, both of which had been retained by A. as a security for B.'s performance of the contract.

2. In an action of covenant, evidence of a parol contract is inadmissible. Had the declaration averred such a contract, it would have been bad on demurrer in the courts of Illinois, as the common law rules of pleading and the distinction between forms of action prevail in that state.

3. Fifty-two assignments of error were filed in this case. The Court condemns such a practice as a flagrant perversion of the rule on that subject.

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