under the contract provisions above quoted the plaintiff was not entitled to monthly progress payments for those portions of the tunnel and open trench which although fully excavated were not yet completed by the installation of the concrete lining. In support of his contention the plaintiff offered evidence of a well settled custom in the construction industry to construe such a contract as permitting progress payments for completed excavation work, even though the tunnel lining was not installed, the payments to be based upon a proper proportion of the unit price for the completed work. I am satisfied that this evidence was relevant and properly admitted. Electric Reduction Co. v. Colonial S. Co., 276 Pa. 181, 120 A. 116; Passaic Valley Sewerage Com'rs v. Tierney, 3 Cir., 1 F.2d 304. It fully justified a finding by the jury that the plaintiff had done more than $5,000 worth of work up to July 31st, and was, therefore, entitled to an estimate and progress payment on August 20th, under paragraph C. 58. Furthermore I am satisfied, as I held at the trial, that so much of paragraph C. 59 as provides that monthly estimates shall only be made where $5,000 in value of work has been done since the last preceding estimate, does not apply to the first estimate made under the contract. Since admittedly no estimates had been made for the plaintiff prior to July 31st it would follow that he was entitled to an estimate up to that date for the work admittedly completed, even though it should be held that he had not done $5,000 worth of work within the meaning of the contract.
Paragraph C. 6 of the contract provided that the engineer should finally determine the amount, quality, acceptability and fitness of the several kinds of work and materials which were to be paid for thereunder and should decide all questions which might arise as to measurement of quantities and the fulfillment of the conditions of the contract on the part of the contractor. The plaintiff's contention was that his rescission of the contract was not based upon any questions coming within the jurisdiction of the engineer under this paragraph. I accordingly submitted to the jury by the fourth interrogatory the question whether the plaintiff was entitled to a monthly estimate or certificate for work done up to July 31st, which the engineer refused to make and the defendant refused to pay for reasons other than the rate of progress of the work or the amount, quality, acceptability or fitness of the work or materials. Its answer in the affirmative established the fact that the defendant's refusal to give the plaintiff the monthly estimate to which he was entitled was for reasons other than those as to which the decision of the engineer was final under the contract.
The defendant contends, however, that there was an honest dispute between the parties as to the right to a progress payment for work done up to July 31st, and consequently the plaintiff was not entitled to rescind because of the defendant's refusal to make that payment. Without passing upon the question of law suggested by this proposition it is sufficient to point out that in my charge to the jury I not only affirmed the defendant's first point which dealt with this question but also in elaboration thereof specifically instructed the jury that the plaintiff would not be entitled to rescind because of the failure to make the payment if there was an honest dispute between the parties with regard to the amount payable or some other feature of the payment. The jury's verdict for the plaintiff accordingly amounted to a finding that there was no honest dispute on this point.
Defendant further urges that the plaintiff, in any event, waived his right to rescind the contract for nonpayment by proceeding under its termination clause. Its argument is that since in his written notice of August 28th he gave the defendant seven days' notice that the contract would be terminated he must be held to have acted under the termination clause contained in the contract and not in rescission thereof. In construing such a notice, however, all the facts, circumstances and actions of the parties must be taken into consideration in arriving at the intention of the party, and technical words will not be given their technical meaning if it is clear the party using them intended otherwise. United States v. O'Brien, 220 U.S. 321, 31 S. Ct. 406, 55 L. Ed. 481. Here the evidence indicated that the plaintiff did not wait the seven days mentioned in his notice but immediately abandoned the work. His action was construed by the defendant's officers at the time as an abandonment. The verdict of the jury and its answers to the interrogatories submitted to it have established the fact that the plaintiff rescinded the contract, not only on the ground of misrepresentation in its inception, but also on the ground of failure to make a monthly progress payment which was required by the contract. Upon the plaintiff's view of the case, which the jury adopted, rescission was justified upon the latter ground irrespective of any termination clause contained in the contract. United States F. & G. Co. v. Robert Grace C. Co., 3 Cir., 263 F. 283; Guerini Stone Co. v. P.J. Carlin Construction Co., 248 U.S. 334, 39 S. Ct. 102, 63 L. Ed. 275; Turner Concrete Steel Co. v. Chester Construction & Contracting Co., 271 Pa. 205, 114 A. 780.
As a final argument in support of its motion or judgment the defendant contends that the plaintiff cannot recover in view of the termination clause contained in the contract. This appears in paragraph C. 45 and provides that if the engineer should fail to issue any certificate for payment within seven days after it is due, or if the City should fail to pay to the Contractor within seven days any sum certified by the engineer, then the Contractor may, upon seven days' written notice, stop work or terminate the contract and recover from the City payment for all work executed and any loss sustained and reasonable profit and damages. The plaintiff's suit was not brought under this clause, however, but on the contrary, as I have indicated, he has sued for damages in rescission. His suit was not brought under the contract but in disaffirmance of it. Under such circumstances he is entitled to damages upon showing that he was entitled to rescind by reason of the default of the defendant. United States v. Behan, 110 U.S. 338, 4 S. Ct. 81, 28 L. Ed. 168; Anvil Mining Co. v. Humble, 153 U.S. 540, 14 S. Ct. 876, 38 L. Ed. 814; United States v. Spearin, 248 U.S. 132, 39 S. Ct. 59, 63 L. Ed. 166. As I have already indicated, the facts as found by the jury fully support his right to rescind the contract upon each of the two grounds upon which rescission was based. It follows that he was entitled to recover damages irrespective of the provisions of paragraph C. 45 of the contract, although, since that paragraph authorizes an award of damages to the contractor terminating a contract under it, I see no reason why it would not support the verdict obtained by the plaintiff in this case.
What has been said disposes also of most of the arguments advanced by the defendant in support of its motion for a new trial. Its remaining arguments in support of this motion are based almost entirely upon the erroneous premise that the plaintiff's sole remedy was under paragraph C. 45 of the contract and that he had no right to sue in rescission of it. However, I have carefully considered all of them and I am satisfied that they are without merit. The issues in the case were submitted to the jury in a charge in which the position of the defendant was, I think, fully and fairly stated. By the findings and verdict of the jury these issues were resolved in favor of the plaintiff. No sufficient reason has been shown why its determination of them should be set aside.
The defendant's motions for judgment in its favor on the point of law reserved and for a new trial are refused.
© 1992-2004 VersusLaw Inc.