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Homer v. Shaw

Supreme Judicial Court of Massachusetts, 1912

212 Mass. 113, 98 N.E. 697

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Brief Fact Summary

Shaw (defendant), the general contractor for the construction of a section of the Tremont Street subway in Boston, subcontracted with Lancaster for excavation and iron work. Lancaster was advanced funding by Homer (plaintiff). Plaintiff's loan was security by a written assignment of sums due under the Lancaster's contract with the defendant. Lancaster notified defendant that he was not able to complete the contract due to financial difficulties. Defendant offered more money and testified that the original contract was entirely rescinded. Plaintiff alleged that there was no new contract, but merely a change in terms of payment. The trial judge gave judgment for defendant.

Rule of Law and Holding

"The parties, while they could not modify to the assignee's prejudice the terms of the contract assigned without the assignee's consent, or by a secret or fraudulent arrangement deprive him of the benefit of the assignment, were not precluded from entering into a new agreement if performance by the assignor had become impossible from unforeseen circumstances."

Edited Opinion

Note: The following opinion was edited by AudioCaseFiles' staff. © 2008 Courtroom Connect, Inc.

OPINION BY: BRALEY

The defendant's liability upon acceptance of the assignment depended upon the assignor's performance of his contract to transport, erect and paint the steel work required for a section of a subway which the defendant was building in accordance with the plans and specifications of the transit commissioners. If not fully performed the entire contract price although payable in monthly installments never became due, or if before completion the assignor by reason of his inability to go on, voluntarily abandoned the work, he could not recover for work and labor already performed and furnished. After the assignor entered upon the performance of the contract he informed the defendant, that owing to the failure of the plaintiff to advance money, which apparently he had agreed to furnish, he would be unable to complete the work as his workmen had not been paid, and if their wages remained in arrears they would leave his employment. The evidence, if no further action had been taken by the parties, and performance of the work had ceased, would have warranted a finding, that, the assignor having repudiated or abandoned his contract before the first installment of the contract price became payable, the defendant would not have been indebted to the plaintiff. But without any ostensible change the assignor remained in charge of the work until completion, and the plaintiff contends under the substituted declaration, that the money thereafter received should be considered as earned under the original contract. The assignor needed immediate financial assistance, and if the defendant might have advanced the money which the evidence shows he furnished to enable him to pay his employees, yet if he had done so the plaintiff's assignment would have been given priority over the loan. The parties while they could not modify to his prejudice the terms of the contract assigned without the plaintiff's consent, or by a secret fraudulent arrangement deprive him of the benefit of the assignment, were not precluded from entering into a new agreement if performance by the assignor had become impossible from unforseen circumstances. It consequently was a question of fact upon all the evidence for the presiding judge before whom the case was tried without a jury, to decide, whether upon facing the exigencies of changed conditions the parties mutually agreed to a cancellation, and thereupon in good faith an independent contract was substituted, by the terms of which the defendant undertook to furnish sufficient funds to pay the workmen the wages then due, and their future wages as they accrued, while the assignor was to receive a weekly salary for his personal services of supervision. The refusal to comply with the plaintiff's requests for findings, and the general finding for the defendant manifestly show his conclusion to have been, that the first contract was treated as having been rescinded, and the plaintiff had no enforceable claim against the defendant under the assignment. The plaintiff's requests for rulings in so far as they were not given were rightly refused, and the exceptions must be overruled.