Lynip v. Alturas School District

On the sixth day of June, 1911, the defendant and one A. E. Pearson entered into a contract whereby the last named agreed to construct a school building for the former for the sum of $20,350j00. By the terms of said contract, said Pearson was to furnish the labor and material for the construction of the building and was to complete the construction thereof, in accordance with plans and specifications

The complaint alleges that, on the sixth day of November, 1911, while engaged in the construction of said school building under the contract whose terms are, in part, above set forth, said Pearson, “being short of funds and by reason thereof being unable to proceed with the erection of said building, which was then in a partial state of completion, applied to this plaintiff for the loan of $430.00, in cash, to enable him to procure the necessary labor and material for use in and upon said school building in the construction thereof; and upon said last named date the said . . . Pearson duly made, executed and delivered to plaintiff an assignment of $430.00 of the money payable to him, the said . . . Pearson, from said Alturas School District for the construction of said building. That said assignment so made ... as aforesaid was in writing and Was in words and figures as follows:

“We hereby recognize the above assignment and hereby agree to pay the sum therein named to the said B. F. Lynip instead of to the said A. E. Pearson, out of the payment to be made by us to the said A. E. Pearson on the construction of said school building at the time of completion and acceptance of said building. Dated this 6th day of November, 1911. F. F. Auble, S. T. Ballard, L. S. Smith, Trustees of Alturas School District.

“This is to certify that the above A. E. Pearson has accomplished work and furnished material and is entitled to more than the amount drawn, including the above amount, as per the 25 per cent basis of his contract upon the completion and acceptance of said school building. H. M. Sweeney Superintendent.

“That relying upon the said assignment of said A. E. Pearson and its approval thereof by said defendant, and the certificate of said superintendent, this plaintiff advanced to the

said A. E. Pearson the said sum of $430.00 in lawful money of the United States, and the said $430.00 so advanced by plaintiff to the said A. E. Pearson as aforesaid, was used by the said A. E. Pearson in paying for labor performed in the construction of said school building and in paying for material furnished in the construction thereof.”

The complaint further avers that, at the time of the execution and delivery to the plaintiff of said assignment, the said school district was indebted to the said Pearson in a sum in excess of the said sum of $430.00, “in this, that by the terms of the contract entered into between the said A. E. Pearson, and the said school district, the said school (district) was to withhold from the monthly payments therein specified twenty-five per cent of the value of the labor performed on said school building and material furnished therefor, until the completion of the building.” It is then alleged that said “building has been completed and is now being occupied by the said defendant for school purposes, but that no part of said sum of $430.00 or any interest thereon has ever been paid to this plaintiff by said defendant or by any one else, ’ ’ and that the same is “now due and owing to plaintiff and unpaid to him.” Upon information and belief, the plaintiff alleges that the defendant “has used and expended for other purposes than paying this plaintiff the sums of money withheld by it out of the money owing by it to the said A. E. Pearson as aforesaid, and that none of said money so withheld by it as aforesaid is now available or will be available at any time hereafter, for the payment of the said $430.00 and interest, or any part thereof to this plaintiff.”

A demurrer on general and special grounds was interposed to the complaint and overruled.

The gist of the defendant’s defense is set forth in paragraph 6 of its answer, wherein it is admitted that the contract above described was entered into on the sixth day of June, 1911, between said Pearson and the defendant; that Pearson thereupon commenced the performance of said contract, and at various times, as the work progressed, the defendant paid to Pearson all sums of money due and owing to him by virtue of the terms of said contract; that, on the first day of January, 1912, and before the completion of the school building according to the terms of said contract, Pearson “neglected

The court found that the contract as above described was entered into between Pearson and the defendant on the sixth day of June, 1911; that Pearson entered upon the execution of the terms of said contract; that, on the sixth day of November, 1911, Pearson borrowed the sum of $430.00 from the plaintiff upon the assignment and indorsements thereon, as set out in the complaint and above quoted; that, at the time of the execution of said assignment, the defendant was indebted to Pearson in an amount greatly exceeding the sum so loaned by the plaintiff to Pearson for work already performed by the latter on said building; that after said assignment was delivered to the plaintiff Pearson performed work and labor upon the building amounting to the sum of $1,497.66, and that after said assignment was made and delivered to plaintiff the defendant paid over to Pearson, for work performed on said building and materials furnished for the same, the sum of $5,200.00; that the defendant paid said Pearson, on account of said contract, the aggregate sum

From its findings, the court concluded, as a matter of law, that “the defendant is justly and legally indebted to plaintiff in the sum of $430.00, with interest thereon at the rate of seven per cent per annum, from December 1st, 1911, to this date, and that said last named sum, with said interest, is now due, owing and unpaid to plaintiff from the said defendant, ’ ’ and, accordingly, awarded judgment to the plaintiff for said amount.

This appeal is by the defendant from the judgment on the judgment-roll alone.

The defendant insists that on the facts found by the court the judgment ought to have been for it.

We can see no way of escaping a conclusion in harmony with the defendant’s position, as above explained.

The court found, as we have seen, that “all of the allegations of the said complaint are true,” and this constituted a finding that the assignment, as set out in haee verba in the complaint, was not only executed but that its terms as so set out are true, and that the defendant accepted and assumed the liability thereby created against it and none other.

The assignment, so found to have been executed and delivered to the plaintiff by Pearson, and acknowledged and accepted by the defendant, needs no construction to ascertain its meaning and scope. It clearly, unambiguously and with unerring certainty speaks for itself, and, as plainly as language can express any proposition, provides that the fund upon which it was intended exclusively to operate was that which the building contract provided should accrue and mature in the hands of the defendant and to become payable to Pearson only upon the completion by him of the building in accordance with the terms of the building contract. As counsel for the defendant suggests, it constituted a mere equitable assignment of moneys subsequently to become due and payable and in no way purports to convey a present interest. In other words, the vitality of the assignment, so far as it was capable of accomplishing any substantial purpose, was made to depend

That the effect and scope of the assignment was understood by all the parties to the transaction of which it was the crystallization to be limited in its operation to the fund to mature on the twenty-five per cent and not on the seventy-five per cent basis prescribed by the building contract, and payable on the completion of the building by Pearson, is clearly and unmistakably emphasized by the language of the written indorsement on the assignment of the acceptance or acknowledgment of said instrument and agreement by the defendant’s board of trustees to pay to the plaintiff, instead of to Pearson, the sum of money named therein. Said indorsement, as seen, reads as follows: “We hereby recognize the above agreement and hereby agree to pay the sum named to the said B. F. Lynip instead of to the said A. E. Pearson, out of the payment to be made by us to the said A. E. Pearson on the construction of said school building at the time of completion and acceptance of said building.” Nothing could be clearer than that, by the foregoing language, the board of trustees of the defendant intended and understood that the assignment was to be restricted in its operation to the fund which, under the terms of the building contract, could only mature when the building had been completed by Pearson and accepted by the defendant, and that, since the liability thus named and assumed by the defendant was precisely the same as that created by the assignment itself, the plaintiff must thus have had emphasized upon his mind the proposition that solely upon the fund to mature only on the final completion of the building was the efficacy of his- assignment made to depend.

It necessarily follows that when, as the court distinctly finds was true, the building contractor abandoned his contract before completing the construction of the building and thus failed to comply with the condition, the execution of which was prerequisitely essential to the maturing of the fund from which only the assignment, by virtue of its own terms, could be satisfied, any liability which the defendant might have

The only finding which furnishes even plausible ground for the contention that the judgment is sufficiently supported is the following: “ . . . That there is now due, owing and unpaid to plaintiff from defendant on account of the money loaned and advanced by him to A. E. Pearson as aforesaid the sum of $430.00, with interest,” etc. But, considered by the light of the averments of the complaint and the other findings, said so-called finding must be treated as a conclusion of law rather than as a finding of fact. We may say that the .so-called finding involves one of those peculiar statements which may constitute either a finding of fact or a conclusion of law, according to the connection in which or the circumstances under which it is employed. As has been well said as to matters designated “findings of fact” and “conclusions of law, ’ ’ in one connection a word or a phrase may stand for a fact, while in another the same word or phrase may designate a conclusion of law. (Hill v. Finigan, 77 Cal. 267 , [ 11 Am. St. Rep. 279 , 19 Pac. 494 ].) Por illustration, in Gay v. Moss, 34 Cal. 125 , it was held that a finding that “the assignment and delivery of the contract was a mortgage and not a pledge,” although stated as a finding of fact, was, in view of the other facts admitted and found, a mere conclusion of law. (See 2 Hayne on New Trial and Appeal, Rev. Ed., p. 1388.) Hence, we say that the so-called finding of fact above referred to cannot, in view of the allegations of the complaint and of the other facts found by the court, be held to be anything more than a mere conclusion of law, as we will now proceed to show.

The foundation of the plaintiff’s right to a recovery is obviously the assignment. Upon that instrument his right to a recovery must stand or fall. As seen, the plaintiff, in his complaint, pleaded and set out in haee verba said assignment. The complaint nowhere alleges that, at the time of the completion of the building, there was any money due from the

It is also true, as before shown, that on the assignment as set out in the complaint is the indorsement of the superintendent of construction of the building to the effect that Pearson “has accomplished work and furnished material and is entitled to more than the amount drawn, including the above amount, as per the twenty-five per cent basis of his contract upon the completion of and acceptance of said school building.” While the language of said indorsement, taken by itself, is rather obscure, the succeeding averment of the complaint renders it perfectly clear that the superintendent of construction entered said indorsement upon the assignment prior to the delivery thereof to the plaintiff and before the transaction to which it related was fully completed—that is, before the plaintiff had actually advanced the money to Pearson-^-and that said indorsement, therefore, solely referred to the twenty-five per cent remaining unpaid to Pearson on the work and materials performed and furnished up to the time of the execution :of

Thus it appears, as above stated, that the complaint does not anywhere allege that there was any money due Pearson on account of his contract with the defendant at the time of the completion of the building.

Now, as to the findings other than the one under present consideration: As has been shown, the court found that the assignment as pleaded by the plaintiff (the foundation of his right to a recovery) was executed and that the terms thereof were as they plainly purport to be by the pleaded instrument itself. The court further found, as seen, that the defendant paid to Pearson, out of the contract price, the total sum of $14,895.00, the last payment being on the eighteenth day of December, 1911, or thirteen days before the time at which the latter abandoned his contract to construct the building, and that the sum then remaining of the contract price, together with the additional sum of $393.38, was required and actually used by the defendant to complete the building according to the terms of the building contract after Pearson had abandoned the same. Prom this finding, it is clear, and, indeed, it irresistibly follows, that the fund the existence of which at the time of the completion of the building was contemplated by

Thus readily will it be observed that, if the so-called finding above adverted to, viz.: “that there is now due, owing and unpaid to plaintiff from defendant on account of the money loaned and advanced by him to A. E. Pearson . . . the sum of $430.00,” etc., is to be regarded as a finding of fact, it would not only not be responsive to or within any issue tendered by the complaint or made by the pleadings, but it would be contradictory'to the other findings which, obviously, were educed from the only evidence proper to be received into the case under the issues as framed—that is to say, it would be irreconcilably inconsistent with the finding that Pearson abandoned his contract before completing the building and with the assignment itself, which, as pleaded by the plaintiff as the sole foundation of his right to a recovery, the court found was executed and delivered to the plaintiff by Pearson in consideration of the loan by the former to the latter of the sum of money therein specified, which finding, in view of the plain and unobscure meaning of the instrument, necessarily implies the further finding (or perhaps it may be more accurate to say compels the legal conclusion) that the assignment was to operate solely upon a fund only to mature, under the terms of the building contract, at the time of the completion of the building by Pearson in conformity with the requirements of said contract and the acceptance of said building, as so completed, by the defendant. Hence, as stated, the so-called finding, although included by the court in its findings of fact, cannot be invested with a higher function than that of a mere conclusion of law, and, as has been shown, one which is obviously erroneous.

But it appears to be the view of counsel for the plaintiff that this case comes within the principle of certain cases wherein it is held that a contractor may abandon a building after the partial completion thereof and at the same time recover for the value of the work and material already performed and furnished. Among the cases cited by counsel as supporting that proposition is that of Adams v. Burbank, 103 Cal. 646 , [ 37 Pac. 640 ]. There is, however, a clearly marked distinction between that case and the case at bar in respect to the facts.

In the foregoing discussion, we have not lost sight of the familiar rule that all presumptions are to be indulged favorably to the support of the judgment, where the appeal is not supported by a bill of exceptions or a statement of the case or other legally authenticated record of the evidence.

Our conclusion is that judgment ought to be entered upon the findings in favor of the defendant. Indeed, it is manifest that the complaint does not state a cause of action against the defendant and that the demurrer should have been sustained on the general ground.

The judgment is reversed, with directions to the court below to enter judgment upon the findings for the defendant.

Chipman, P. J., and Burnett, J., concurred.