Ordinarily the plaintiff should be allowed to recover the reasonable worth of his part performance, less any payment or other benefit received from the defendant.3 In the case of improvements upon land, for instance, since they are made at the request of the defendant, he should be required to pay the value of the labor and materials employed whether the land is enhanced in value or not.4 Moreover, though there are authorities to the contrary,1 it seems clear that since the plaintiff is not guilty of breach of contract there should be no deduction for damages suffered by the defendant by reason of the plaintiff's inability to complete performance. But the recovery should in no case be permitted to exceed an amount bearing the same ratio to the contract price for full performance as the value of the part performance bears to the value of full performance.2 Otherwise the plaintiff might actually profit by the impossibility of completing performance, and the defendant, who is not in default and who is not responsible for the plaintiff's failure to complete performance, might be compelled to pay for the plaintiff's part performance not only at a higher rate of compensation than he actually agreed to pay but at a higher rate then he would have been willing to pay.
18 W. Va. 400, 423. In that case the court criticized the measure of recovery adopted in New York Life Ins. Co. v. Statham. See post, Sec. 126.
1 1795, 6 Term R. 320.
2 "Quasi-Contracts," p. 247.
3 Coe v. Smith, 1853, 4 Ind. 79; 58 Am. Dec. 618.
4 Dame v. Wood, 1908, 75 N. H. 38; 70 Atl. 1081, 1082. And see Clark v. Gilbert, 1863, 26 N. Y. 279; 84 Am. Dec. 189, (services). But see Binz v. National Supply Co., 1907, Tex. Civ. App. ; 105 S. W. 543; Hubbard p. Belden, 1855, 27 Vt. 645, (services: actual benefit to employer only).
In the New York case of Jones v. Judd3 arising out of a contract expressly fixing a rate of compensation instead of an aggregate price, the plaintiff was allowed to recover at the contract rate for his part performance. And in the Indiana case of Coe v. Smith,4 the court said that "the amount recovered must, in no case, exceed the contract price, or the rate of it for the part of the contract performed." As a means of measuring the recovery, the contract rate is of course unsatisfactory, since it does not always accurately express the value of the performance. As a means of limiting the recovery, it is satisfactory in case it parallels perfectly the value of the services - that is to say, either if the units of service contemplated by the contract are of uniform value, or if the rate fixed by the contract varies with the variation in value. Otherwise, it is not. Suppose, for example, as was actually the case in Jones v. Judd, one contracts to do a large amount of construction work, some parts of which are expected to be more difficult and expensive than others, at a uniform price per cubic yard. If, before performance is interrupted by impossibility, the more difficult and expensive work is done, the benefit derived from such part performance is greater than the amount due under the contract; on the other hand, if only the less difficult and expensive part of the work is done, the resulting benefit is less than the sum due under the contract. The true limit of recovery, in either case, is such a proportion of the contract price as the value of the part performed bears to the value of complete performance.
1 Clark v. Gilbert, 1863, 26 N. Y. 279; 84 Am. Dec. 189; Patrick v. Putnam, 1855, 27 Vt. 759; Walsh v. Fisher, 1899, 102 Wis. 172 ; 78 N. W. 437 ; 43 L. R. A. 810; 72 Am. St. Rep. 865. And see Coe v. Smith, 1853, 4 Ind. 79; 58 Am. Dec. 618; Wolfe v. Howes, 1859, 20 N. Y. 197; 75 Am. Dec. 388.
2 Dame v. Wood, 1908, 75 N. H. 38; 70 Atl. 1081, 1082; Clark v. Gilbert, 1863, 26 N. Y. 279; 84 Am. Dec. 189.
3 1850, 4 N. Y. 411.
4 1853, 4 Ind. 79, 82; 58 Am. Dec. 618.
In New York Life Insurance Company v. Statham,1 the United States Supreme Court held that where the outbreak of war prevents further payments of premiums on an insurance policy, the insured is entitled to recover the premiums paid by him "subject to a deduction for the value of the assurance enjoyed by him whilst the policy was in existence." This was criticized in the West Virginia case of Abell v. Penn Mutual Life Insurance Company,2 as permitting the insurance company to retain not only a sum sufficient to compensate it for the risk it had run but a large ad- . ditional sum for profits. What should be deducted, it was there contended, is not the "value of the assurance" but the cost of the assurance, i.e. the cost to the company of carrying the risk. But clearly the company is enriched unjustly only to the extent that the benefit it has received - the premiums - exceeds in value the benefit it has conferred - the insurance. The amount to be deducted therefore is the value of the insurance to the insured, as was held in New York Life Insurance Company v. Statham.