#6792 - Boomer V. Muir - Restitution of Unjust Enrichment BCL

Boomer v. Muir

Facts

R.C. Storrie & Co., a co-partnership composed of Robert B. Muir and Robert C. Storrie, had a general contract with the Feather River Power Company to build a hydroelectric project in the high mountains on certain tributaries of the north fork of the Feather river. The project was one of great magnitude, and under their contract Storrie & Co. were to receive a flat price of $7,691,889…. The project involved, as one item, the construction of a storage dam in Buck's Valley to impound the waters of Buck's creek.

On May 28, 1926, Storrie & Co. entered into a subcontract with H.H. Boomer for the construction by him of the Buck's creek dam, the work to be done in accordance with the plans and specifications of the Feather River Power Company and to the satisfaction of that company's engineer. Under this subcontract Storrie & Co. were to deliver at the dam site to Boomer all cement, gravel, sand, steel and other metal work which was to be a permanent part of the dam. Boomer was to furnish all other materials and labor and equipment.

On the basis of such estimates Storrie & Co. were to pay Boomer monthly 90 per cent. of the estimate, the remaining 10 per cent to be paid upon the completion of the contract.

When Boomer commenced performance of his subcontract, almost immediately friction developed between Boomer and Storrie & Co., and such friction and disputes continued as long as Boomer remained on the job. A discussion of the nature and character of these disputes will be deferred to a later portion of this opinion. Suffice it to say here that, when Boomer shut down for the winter at the end of 1926, a much smaller portion of the work had been done by him than the parties had anticipated at the inception of their contract. In a mutual effort to speed up the work in 1927, Boomer and Storrie & Co. entered into a supplemental agreement on March 4, 1927, whereby the original contract between them was considerably modified.

Boomer proceeded with the work on the dam in 1927, and the disputes between Boomer and Storrie & Co. continued much as before, culminating with Boomer's leaving the job uncompleted in December, 1927.

The relevant claim made by Boomber here is upon a quantum meruit for the reasonable value of the work done less the payments received.

The dispute here arose because here, the market price would have allowed Boomer to recover $250,000, whereas if it had completed the contract, it would have received no more than $20,000.

Holding

It is well settled in California that a contractor who is prevented from performing his contract by the failure of the other party to furnish materials has a choice of three remedies: He may treat the contract as rescinded and recover upon a quantum meruit so far as he has performed; he may keep the contract alive, offering complete performance, and sue for damages for delay and expense incurred; or he may treat the repudiation as putting an end to the contract for purposes of performance and sue for the profits he would have realized.

It is further urged that, “assuming that prevention of performance was shown, the contractor may not, where the contract has been fully liquidated up to a given stage, reopen the part of the contract which has been fully executed on both sides and seek to have his past work revalued.” In this connection it is pointed out that, at the time Boomer left the job in December, 1927, the monthly estimates provided for in the contract had been made up to November 25, 1927, and Boomer had been paid in full for all work covered by these estimates, with the exception of the retained percentage of 10 per cent, for three months after May, 1927, in which months Boomer had not placed 40,000 cubic yards of material in the dam as provided in the supplemental agreement. It is conceded that the general rule, and the one followed in California, is that, where a contract has been rescinded for prevention of performance, the plaintiff may recover the reasonable value of what he has done or supplied under the contract, even though such recovery may exceed the contract price.

Can recovery in excess of the contractual ceiling be permitted even in cases where specific portions of the work have been liquidated under the contract and paid for?

It is insisted, however, that this general rule does not apply in cases where specific payment is provided in the contract for specific portions of the work, and such portions have been fully performed and payment for which has been fully ascertained and liquidated prior to the breach by the adverse party.

We are not impressed by the rule announced in these two cases. It being settled as the general rule that upon prevention of performance the injured plaintiff may treat the contract as rescinded and recover upon a quantum meruit without regard to the contract price, why should he be limited to the contract price in case payments for portions of the entire contract have been made or liquidated? Those payments were received in full only on condition that the entire contract be performed. But, if the contract is rescinded, the prices fixed by the contract are...