Opinion
No. 244.
Submitted November 28, 1973. —
Decided January 21, 1974.
APPEAL from a judgment of the circuit court for Winnebago county: EDMUND P. ARPIN, Circuit Judge. Affirmed.
For the appellant the cause was submitted on the brief of A. Warren Cahill of Waukesha.
For the respondent the cause was submitted on the brief of Duane G. Philis of Neenah.
This is an action for the recovery of reasonable value of services rendered to the defendant under a masonry construction contract.
The facts are almost totally undisputed. On August 21, 1967, the parties to this action, Raymond Voight d/b/a Ray Voight Building Service (plaintiff-respondent) and Robert W. Nanz d/b/a Nanz Realty (defendant-appellant), entered into a written contract for masonry work on an apartment building being built by Nanz Realty. The plaintiff made the lowest bid for the masonry work. He agreed to do the required work for a total of $17,490. Provision for payment was indicated as "Net: 10 days after semi-monthly statements, as work is done." The contract also provided that there should be "No retained money or financing."
The plaintiff commenced work and submitted a first request for payment for $2,266, dated September 22, 1967. This was paid by Nanz check dated October 12th. On September 30th the plaintiff again mailed a request for payment in the amount of $3,691. This was paid by Nanz check dated October 19th.
The plaintiff was progressing on the construction work and continued to submit periodic billings. The plaintiff submitted two "invoices" dated November 24, 1967. One was for work on the contract in the amount of $845, and the other was for extra work not included in the contract in the amount of $1,097.72. The plaintiff continued with his work on the contract and submitted another bill for $4,000 dated December 27th. On the bottom of this bill was written:
"You are past due on our agreement. #254 Statement Nov. 24-67 $845. Extra cost — 255 " " " " 1097.72 Insurance 257 " Nov. 29-67 95."The plaintiff continued to work and submitted another bill dated January 30, 1968, in the amount of $500 and a separate billing of the same date for extras in the amount of $122.80. The bill for $500 had this notation on the bottom:
"Ned, you are very much delinquent on our agreement of the Oshkosh Apartment job.
Ray
"Lets use paid this now. O.K. Ned now.
$6,660.52"
Thereafter on February 16th the plaintiff received and accepted a check from the defendant in the amount of $1,942.72, which was apparently in payment of the billings of November 24, 1967, for $845 and $1,097.72 worth of "extras." The billings dated December 27, 1967, and January 30, 1968, were still unpaid. No work was done on the site until March 11, 1968 (since the contract provided for no cold-weather work). On March 11th the plaintiff erected a panel of exterior bricks for approval before applying the entire exterior brick work.
On March 12, 1968, the plaintiff apparently had a discussion with an agent of the defendant, Ned Lyke. Lyke had signed the original contract and was supervising the construction work. Lyke testified at the trial that the $4,000 billing was not paid because in his opinion it would have constituted an overpayment for the work in place at the time of billing. He estimated the cost of the remaining work and subtracted this from the funds remaining in the account set aside to pay the contract price. This resulted in a sum of approximately $2,000 which Lyke felt was the amount which the defendant "really owed him at that particular moment."
By letter of the same date Lyke proposed that funds be paid to the plaintiff through the Appleton Building and Loan Association. The letter also informed the plaintiff that in the event he did not recommence work on the exterior brick veneering no later than March 18, 1968, the defendant would contact another mason to complete the work.
Further conversations occurred between the parties including one in the office of the plaintiff's attorney. However, Lyke testified that he could not recall the content of that conversation. These conversations culminated in another letter from the defendant to the plaintiff's attorney dated March 25, 1968. This letter was accompanied by a check for $2,000. The letter indicated that another $2,000 would be paid on April 5th, if at least 2,000 square feet of veneering were in place on that date. In addition the defendant offered to pay the balance of the contract price including the extras billed to date on April 19, 1968, if the work was completed by that date. The letter stated:
"Please note that the check has been sent to you conditioned upon your acceptance of all terms and conditions set forth in this letter and note that the check will become invalid and the offer terminated unless the check is presented for payment at our bank on or before April 1st, 1968. If the check has not been presented for payment by that date we will assume that your client does not intend to complete his obligations on our building and will take steps to arrange for completion of this work by an outside contractor. . . ."
The plaintiff did not accept the check and an outside contractor was called in to complete the contract. The plaintiff testified that he felt the conditions attached to the acceptance of the check were a violation of the original contract terms which called for no retained money or financing. The defendant did call in Miller Masonry, Inc., of Kaukauna, Wisconsin, to finish the contract. The defendant paid this company $8,628.64 for completing the contract. The trial court indicated that the testimony was uncontroverted as to the reasonable cost of completion. On May 13, 1968, the defendant tendered a check to the plaintiff in the amount of $1,940 as settlement of what remained unpaid to plaintiff for services rendered. This amount represented the contract price minus payments already made and minus the cost of completion of the contract.
The trial court refused to direct a verdict in the amount of only $2,277.16, as asked by the defendant, but affirmed the jury verdict for the plaintiff in the sum of $4,500. The defendant appeals from the judgment entered for the plaintiff in the amount of the verdict.
The sole issue on this appeal is whether the trial court erred in denying the defendant's motion for directed verdict.
The verdict was submitted to the jury in the form of a single question as to how much money was owed to the plaintiff by the defendant. Neither party objected to the form of the verdict. Nor were any objections made on the record to any of the instructions given to the jury. The defendant on appeal claims that on the evidence adduced at the trial he was entitled to a directed verdict that he owed the plaintiff $2,277.16.
"[A] verdict should only be directed against a plaintiff where plaintiff's evidence, given the most favorable construction it will reasonably bear, is insufficient to sustain a verdict in plaintiff's favor." The trial court ruled that it was a question for the jury as to which of the parties breached this contract. The defendant moved for directed verdict at the end of the plaintiff's evidence stating that the plaintiff's testimony did not show that the defendant at any time breached the contractual agreement.
Quality Lumber Coal Co. v. Kemp (1970), 46 Wis.2d 621, 624, 176 N.W.2d 401; Wallow v. Zupan (1967), 35 Wis.2d 195, 198, 150 N.W.2d 329.
The undisputed testimony shows that the plaintiff discontinued work on the defendant's apartment building before all the work called for under the written contract was completed and at a time when certain billings which had been rendered by the plaintiff to the defendant had not been paid by the defendant. The trial court was correct in concluding that it was an issue for the jury to decide on the evidence presented which of the parties breached the contract.
In American Jurisprudence it is stated that:
"Whether the wrongful withholding by the owner of amounts due under the terms of a building or construction contract is an excuse for nonperformance on the part of the contractor depends upon whether the contract so provides or whether, in the absence of such a provision, such conduct prevents performance."
13 Am. Jur. 2d, Building and Construction Contracts, p. 66, sec. 62.
And in Corbin on Contracts it is said:
"Although a builder may be privileged to suspend work, or even to renounce the contract, by reason of the nonpayment of an instalment, he is not required by the law to do either one. If he wishes to do so, he may proceed with the work, treating the nonpayment as a mere partial breach. He may get judgment for the amount that is due; or he may wait until completion and sue for the full price with damages for the delay in payment."
A Corbin, Contracts, p. 273, sec. 692.
There is no doubt that a breach of a contract may be waived. The contract in this case called for payment ten days after each billing. However, the plaintiff accepted the first two payments which were made more than ten days after billing and the plaintiff continued to work steadily on the contract until the end of January even though defendant was seriously late in paying several billings. If failure to comply with the provision as to time of payment would have justified the plaintiff in rescinding the contract, this conduct could be considered a waiver of the right to rely on the delay in payments as a ground for rescission.
In Stolper Steel Products Corp. v. Behrens Mfg. Co. this court said:
(1960), 10 Wis.2d 478, 487, 103 N.W.2d 683, quoting from 1 Black, Rescission and Cancellation (2d ed.), p. 623, sec. 219.
"`Even where time is made the essence of a contract, this provision may be waived by the party for whose benefit or protection it is inserted, either expressly or by extending the time for payment or performance or by granting indulgence to the other party in this regard; and when such a waiver has been made, he cannot arbitrarily and summarily declare a forfeiture of the contract for delay, but must first demand payment or performance and give the other party a reasonable time and opportunity, after such demand, to comply.'"
The defendant points out in his brief that the plaintiff never made written demand for payment, fixing a date after which he would consider the contract terminated. However, the Stolper Case does not state that such notice or demand must be in writing and the defendant's brief does not cite any authority for that proposition. The plaintiff testified he had notified Ned Lyke and Robert Nanz by telephone that he could not continue because of the late payments. The defendant offered to pay $2,000 and this offer was made contingent upon the acceptance of certain conditions as to future payment which differed from the terms of the original contract.
". . . So too, the refusal of one party to perform an executory contract unless the other party consents to a modification, as distinguished from a mere request for a modification, amounts to a total breach of the agreement."
17 Am. Jur. 2d, Contracts, p. 901, sec. 443. See also: Stolper Steel Products Corp. v. Behrens Mfg. Co., supra, footnote 4, at page 488; Richards v. Manitowoc Northern Traction Co. (1909), 140 Wis. 85, 121 N.W. 937.
The plaintiff did not cite a demand for modification of the contract as a breach of the contract but rather alleged the failure to make payments as required by the contract as the breach on which the plaintiff based his refusal to, continue.
We conclude that the evidence, viewed most favorably to the plaintiff, is not insufficient to support a verdict that the defendant had breached the contract between the parties by refusing to pay the periodic billings authorized by the contract.
Both parties in stating the question involved in their briefs refer to "substantial performance." The doctrine of substantial performance is not involved in this case. The plaintiff is not suing for his full contract price alleging that he has substantially performed the contract. The plaintiff is suing in quantum meruit claiming the defendant breached his contract. By the Court. — Judgment affirmed.
Kreyer v. Driscoll (1968), 39 Wis.2d 540, 159 N.W.2d 680, states that a dispensation in favor of the contractor on the theory substantial performance should be granted in cases of incompleteness only when such details are inconsiderable and not the fault of the contractor.
See 3A Corbin, Contracts, p. 274, sec. 693, for remedies of the contractor when the owner breaches a construction contract.