The theory of the remedy being that the parties should be placed substantially in statu quo, the measure of recovery is the value of the plaintiff's performance. In case the plaintiff is allowed to recover without first returning money received by him from the defendant (ante, Sec. 265), the amount so received must, of course, be deducted. By the weight of authority, while the price or rate of compensation fixed by the contract is evidence of value,4 the plaintiff is not restricted to such price or rate but may recover whatever he proves the performance to have been actually worth:
1 Kennedy v. Embry, 1888, 72 Tex. 387, 390; 10 S. W. 88; Phillips v. Herndon, 1890, 78 Tex. 378; 14 S. W. 857; 22 Am. St. Rep. 69.
2 Thresher v. Stonington Bank, 1896, 68 Conn. 201; 36 Atl. 38; Trinkle v. Reeves, 1861, 25 111. 214; 76 Am. Dec. 793; Fay v. Fitz-patrick, 1905, 130 la. 279; 105 N. W. 398; Raymond v. Bearnard, 1815, 12 Johns. (N. Y.) 274; 7 Am. Dee. 317.
3 Finch v. Parker, 1872, 49 N. Y. 1.
4 Reynolds v. Jourdan, 1856, 6 Cal. 108 ; Monarch v. Board of Comrs., 1897, 49 La. Ann. 991; 22 So. 259; Rodemer v. Hazelhurst, 1850, 9 Gill (Md.) 288; Fitzgerald v. Allen, 1880, 128 Mass. 232; Siebert v. Leonard, 1871, 17 Minn. 433; In Siebert v. Leonard, supra, the court said: "And as the plaintiff has the right to insist that he shall not lose anything by the fault of the defendants in thus preventing the performance of the contract, he has the right to claim that he shall receive as much for such materials and services as he would have received for the same if he had gone on and completed the special contract." This goes too far. If the plaintiff wishes compensation for his loss, he should not rescind the contract, but should bring an action for damages. If he rescinds, he is entitled only to the fair value of his performance and has no right "to insist that he shall not lose anything by the fault of the defendants."
Fitzgerald v. Allen, 1880, 128 Mass. 232: Lord, J. (p. 234): "The result of the cases is, that, if the special contract is terminated by any means other than the voluntary refusal of the plaintiff to perform the same upon his part, and the defendant has actually received benefit from the labor performed and materials furnished by the plaintiff, the value of such labor and materials may be recovered upon a count upon a quantuum meruit, in which case the actual benefit which the defendant receives from the plaintiff is to be paid for, independently of the terms of the contract. The contract itself is at an end. Its stipulations are as if they had not existed. But this does not imply that the contract may not be put in evidence, and its terms referred to, upon the question of the real value to the defendant of the plaintiff's labor and materials." 1
In some jurisdictions, however, a failure to realize the nature of the remedy has led to the illogical rule that the recovery must be limited in every case by the contract price or rate.2 That is to say, whatever may be the actual value of the plaintiff's performance, he should not be permitted to recover more than he had agreed to take and the defendant had agreed to pay for such performance:
1 Accord: Valente v. Weinberg, 1907, 80 Conn. 134; 67 Atl. 369; 13 L. R. A. (N. S.) 448; Rodemer v. Hazelhurst, 1850, 9 Gill (Md.) 288; Fitzgerald v. Allen, 1880, 128 Mass. 232; Bailey v. Marden, 1906, 193 Mass. 277; 79 N. E. 257; Kearney v. Doyle, 1871, 22 Mich. 294; Hemminger v. Western Assurance Co., 1893, 95 Mich. 355; 54 N. W. 949; (but see Eakright v. Torrent, 1895, 105 Mich. 294; 63 N. W. 293); McCullough v. Baker, 1871, 47 Mo. 401; Smith v. Keith & Perry Coal Co., 1889, 36 Mo. App. 567; Clark v. Manchester, 1872, 51 N. H. 594; Clark v. New York, 1850, 4 N. Y. 338; 53 Am. Dec. 379; Wellston Coal Co. v. Franklin Paper Co., 1897, 57 Ohio St. 182; 48 N.E. 888; Philadelphia v. Tripple, 1911, 230 Pa. St. 480; 79 Atl. 703 ; Derby v. Johnson, 1848, 21 Vt. 17; Chamberlin v. Scott, 1860, 33 Vt. 80. And see United States v. Behan, 1883, 110 U. S. 338, 345; 4 S. Ct. 81; Clover v. Gottlieb, 1898, 50 La. Ann. 568; 23 So. 459.
2 Dobbins v. Higgins, 1875, 78 111. 440; Chicago v. Sexton, 1885, 115 I11. 230; 2 N. E. 263; Rice v. Partello, 1899, 88 I11. App. 52; Western v. Sharp, 1853, 14 B. Mon. (53 Ky.) 144; Doolittle v. McCullough, 1861, 12 Ohio St. 360, (but see Wellston Coal Co v. Franklin Paper Co., 1897, 57 Oh. St. 182; 48 N. E. 888) ; Noyes v. Pugin, 1891, 2 Wash. 653; 27 Pac. 548.
Doolittle v. McCullough, 1861, 12 Ohio St. 360: The plaintiff had contracted with the defendants to make certain excavations on a section of railroad bed at eleven cents per cubic yard. The plaintiff did the least expensive part of the work and received payment therefor according to the contract price, but before the plaintiff completed performance the defendant repudiated the contract and employed others to do the work. Thereupon the plaintiff rescinded and sought to recover twenty cents per cubic yard for the work done, claiming that to be its real value. Sutliff, J. (p. 366): "But when the special contract is proved, whether by the plaintiff, or defendant, under which the services were rendered; the special, and not the implied contract must determine the rights and liabilities of the parties arising in regard to the services. The price having been determined and mutually agreed upon by them, neither of the parties can vary the price so fixed by the contract. Nor, as to the price of the services actually rendered under the contract, while in force between the parties, can it avail the plaintiff, bringing his action to recover therefor, that since the rendering the services, the defendant has put an end to the special contract. The fact would still remain, that the services were rendered under a special contract, and at the price agreed upon, and expressed by the parties." 1
1 In the later Ohio case of Wellston Coal Co. v. Franklin Paper Co., 1897, 57 Ohio St. 182 ; 48 N. E. 888, the court said, with reference to Doolittle v. McCullough (p. 186): "The rule there stated may be regarded as a proper one in a case where, as in that case, it appears from the claim of the plaintiff, that the breach of the contract by the defendant worked no loss, but a benefit to him, on the ground, as appears, that had he been required to complete the work, he would have suffered a much greater loss; for, if the least expensive part of the work could not have been done without loss, it follows that the doing of the remaining part, under the contract, would have resulted in a still greater loss. The action upon a quantum meruit is of equitable origin, and is still governed by considerations of natural justice. Hence, when one has performed labor or furnished material under a contract that is wrongfully terminated by the other party before completion, the question arises whether the party not in fault should be confined to the contract for what he did, or to a quantum meruit; and this must depend upon whether the act of the other party in terminating the contract, works a loss or not to him, regard being had to the contract. If it works no loss, but is in fact a benefit, as in the case of Doolittle v. McCullough, there are no considerations of justice requiring that he Where the defendant's breach appears to have been unavoidable, there is, perhaps, no serious objection to this limitation, except that it disregards the fact that a contract rate is fixed in anticipation of full performance, and consequently cannot fairly be regarded as the rate agreed upon for part performance. This is strikingly exemplified in the case of Wellston Coal Co. v. Franklin Paper Co.,1 where it appeared that, under a contract by which the plaintiff agreed to furnish coal for a year at a flat rate per ton, the defendant received the coal during that part of the year when the market was above the contract price, but broke the contract when the dull season arrived and the market fell below the contract price. Even if the breach in that case had been unavoidable it would have been unjust to limit the plainshould be compensated in a greater sum for what he did than is stipulated in the contract. These considerations exercised a controlling influence in the case just referred to. The plaintiff had a contract with the defendant for the making of certain excavations in the construction of a railroad. He was to receive for the entire work eleven cents per cubic yard. He had performed the least expensive part of the work when the contract was wrongfully terminated by the defendant, and on this part, by his own showing, he had suffered a loss. The proof showed that the performance of the remainder, being hardpan, would have cost him a great deal more. It was then evident, as the court observed, that he had sustained no loss but a benefit, from the termination of the contract by the defendant. But in the case before us the facts are very different. They are in fact just the reverse. The contract was for the delivery of coal at a price generally received during the dullest season of the whole year. The defendant received the coal during the season when the market was above the contract price. He had the benefit of the difference between the market and the contract price; but when the dull season arrived, and the advantages of the contract would accrue to the plaintiff, the defendant repudiated it. The difference between the two cases is thus apparent. In the case before us, justice and fair dealing require that the defendant having repudiated the contract, should pay the market price for the coal at the time it was delivered; in the former Case, as the repudiation of the contract by the defendant did not enrich him to the loss of the plaintiff, there were no considerations of justice on which the plaintiff could claim more than the contract price for what he had done under the contract."
This restriction of the rule to cases where it appears that the defendant's breach or repudiation actually saved the plaintiff from loss reduces it almost to innocuity.
11897, 57 Ohio St. 182; 48 N. E. 888.
Sec. 269] restitution as alternative remedy [Part IV tiff's recovery to the contract price of the coal delivered. Where the defendant has negligently failed or willfully refused to do what he contracted to do, or has intentionally interfered with the plaintiff's performance, he should certainly be compelled to pay the full value of what he has received, even though it exceeds the contract price. As the court said in Derby v. Johnson:1 "We think the defendants have no right to say that the contract which they have thus repudiated, shall still subsist for the purpose of defeating a recovery by the plaintiffs of the actual amount of labor and materials they have expended."