Bellwood Discount Corp. v. Empire Steel Buildings Co.

Plaintiff, referred to herein as Bellwood, seeks (1) to rescind a building contract that it had entered into with defendant, referred to herein as Empire, and (2) to recover its initial payment under said contract.

By the terms of this contract, entered into in March, 1956, Empire agreed to furnish all labor and materials to construct a tapered girder steel panel building on a parcel of land, owned by plaintiff, in the city of Indio, and “. . . to furnish necessary engineering of structural steel and concrete block walls and foundation drawings only.” (Emphasis added.) Under the heading Work not included was the following:

“Any item not specifically mentioned, electrical, plumbing, concrete work, reinforcing steel, painting, or interior partitions.” The contract also stated that the contractor “. . . will obtain necessary permits covering the work set forth in this contract at the expense of the owner.” (Emphasis added.) The contract price was $34,000, and the final 10 per cent was payable “upon completion of Empire’s portion of the work. ...” (Emphasis added.)

This building was to be the repair shop portion of a structure that Bellwood was erecting for use as an automobile agency. Bellwood’s own architect was to design the showroom and the other facilities which comprised this development.

After the contract was signed, Empire prepared a set of plans for submission to the Building Department of Indio covering the structural details of the contemplated building and the concrete walls and foundations. These plans were

From the foregoing it is apparent that no provision for either a sprinkling system or a fire resistant interior wall was included in the contract and that Empire owed Bellwood no duty with respect thereto. These items were collateral to the agreement of the parties. Therefore, the court correctly held that plaintiff had no right to rescind on the ground of mistake. (Civ. Code, §§ 1577, 1578; Hannah v. Steinman, supra; Vickerson v. Frey, supra.)

Bellwood also contends that it had a right to rescind the contract on the grounds of fraud, illegality and impossibility of performance. On the issue of fraud, the trial court in a memorandum opinion stated: “Because the terms of the contract placed no duty upon Empire to advise Bellwood regarding phases of the project not covered by the contract, Empire had no duty to speak on those subjects, and its failure so to do cannot amount to fraud.” We agree with this conclusion which is in harmony with the findings. Furthermore, the court upon sufficient evidence held that failure to obtain the necessary permits and to proceed further with the work under the contract was due entirely to the refusal of Bellwood to supply the necessary additional information to the building department. Therefore, performance by Empire would have been neither illegal nor impossible if Bellwood had met its obligations under the contract. Bellwood’s further contention, that the contract was illegal in that Empire did not perform the required engineering services as a registered engineer, is answered by the direct evidence that Empire’s Chief Engineer, Mr. Karp, was a registered civil and structural engineer and personally drew the plans. (Bus. & Prof. Code, § 6738, subd. (a) (1).)

Bellwood also complains of the trial court’s decision that it was not entitled to the return of any portion of the

The Freedman case laid down the rule that a defaulting vendee could be relieved from forfeiture upon proof of unjust enrichment even though his default was willful. The rule of the Freedman case was discussed in Bird v. Kenworthy, 43 Cal.2d 656 [ 277 P.2d 1 ], the court holding (p. 659) : “To have the benefit of the rule against unjust enrichment, the burden of proof is upon the defaulting vendee to show that_ the payments made by him exceed the vendor’s damages.” Assuming that the rule of the Freedman case applies in the present case, Bellwood has not shown that Empire was unjustly enriched.

On this issue Bellwood only offered to prove Empire’s loss of profits occasioned by the former’s breach of contract. This offer was rejected by the trial court. The rejection of this evidence was entirely proper for the reason that it did not encompass the full scope of the damage suffered by Empire as a consequence of the breach. Only such amount as remained after full compensation to Empire would constitute unjust enrichment. In Cederberg v. Robinson, 100 Cal. 93 [ 34 P. 625 ], the court quoted with approval the language of United States v. Behan, 110 U.S. 338 [ 4 S.Ct. 81 , 28 L.Ed. 168 ] : “The profits and losses must be determined according to the circumstances of the case and the subject matter of the contract. The reasonable expenditures already incurred, the unavoidable losses incident to stoppage, the progress attained, the unfinished part and the probable cost

The trial court awarded Empire an attorney’s fee of $1,500. Bellwood assigns this ruling as error, but its position is not well taken. The contract between the parties provides: “In the event suit shall be instituted by reason of this contract by either party hereto, the prevailing party in any such suit or settlement shall be entitled to payment by the other party of such reasonable attorney’s fees and court costs as actually incurred and/or paid by such party.” (Emphasis added.) Empire, as the prevailing party, was entitled to “reasonable” attorney’s fees. An appellate court will not disturb an award of attorney’s fees made by the trial court in the absence of a manifest abuse of discretion. (Credit Bureaus of Merced County, Inc. v. Shipman, 167 Cal.App.2d 673 [ 334 P.2d 1036 ]; Biaggi v. Sawyer, 75 Cal.App.2d 105 [ 170 P.2d 678 ].) In view of the record in this case, the award is not excessive.

The judgment is affirmed.

Ashburn, J., and Herndon, J., concurred.