Opinion
September 12, 1957 —
October 8, 1957.
APPEAL from a judgment of the civil court of Milwaukee county: THADDEUS J. PRUSS, Judge. Affirmed.
For the appellant there was a brief by Dougherty, Arnold, Philipp Murray of Milwaukee, attorneys, and Clayton A. Cramer of Waukesha of counsel, and oral argument by Mr. Cramer.
For the respondent there was a brief by Kenney Hays and Giles F. Clark, all of Milwaukee, and oral argument by Mr. Clark.
Action by the plaintiff to recover from the defendant the balance owing on a contract for drilling a well and for the amount due for certain extra services performed and materials furnished in deepening such well.
For some years the defendant corporation has been engaged in conducting a rendering business in the town of Muskego in Waukesha county. Sometime prior to September 28, 1951, a fire destroyed its plant. As the result of such fire, grease got into the well from which the plant derived its water supply and contaminated it. Because of such contamination the state board of health refused to permit further use of the well. Mr. Wauer, president of the defendant, then contacted Mr. Milaeger, president of the plaintiff corporation, and negotiations were had between the parties for the plaintiff drilling a new well, Under date of September 28, 1951, the plaintiff submitted the following offer to defendant:
"In line with our talk of this week we are pleased to quote you for the drilling of an 8-inch well as follows:
"Well will be started by driving 8-inch pipe to the water-bearing gravel formation which will be encountered at about 190 feet. When the casing has penetrated this formation, we will perform a bailer test free of charge. If it is found that sufficient water can be had, we will make a test with a 6-inch cylinder and our well machine. This will be a five-hour test.
"We will drill this well for a price of $10 per foot. This price will include the drilling of the well, furnishing of 8-inch pipe, 8-inch shoe, and one five-hour test.
"In the event that the gravel will not produce sufficient water, we will continue the 8-inch pipe and 8-inch hole until sufficient water is obtained. If the well is drilled into the limestone, we will charge you $6 per foot instead of $10 per foot for any hole drilled where casing is not necessary.
"While drilling this new well, we will acidize your old well and eliminate the contamination you spoke of.
"We can start this work within a few weeks. Please sign one copy of this contract and return to us and oblige."
Such offer was accepted in writing by defendant under date of October 1, 1951.
Thereafter, the plaintiff commenced its well-drilling operations on defendant's premises and by early January, 1952, such new well had been drilled to a depth of 202 feet. The plaintiff ran a test of such well on January 11, 1952. It then removed its well-drilling equipment from defendant's premises and submitted its statement to the defendant in the sum of $2,205.10 as follows:
"1952 "202 feet of 8" drilling @ $10 per foot . . $2,020.00 30 feet of 6" steel pipe @ $2.25 per ft. . 67.50 Perforating 6" pipe-welder. . . . . . . . . 17.50 Extra Pumping Test "Jan. 11 — Install pipe and cylinder and pumping 2 men and machine . . . . . . 8 hours "Jan. 14 — Remove pipe and cylinder 2 men and machine . . . . . . 2 hours ------- 10 hours 10 hours @ $10 per hour . . . . . . . . . . . . . . 100.00 ----------- $21,205.10" The defendant on February 1, 1952, forwarded its voucher check to the plaintiff in the sum of $1,054.75, which check was accepted and cashed by plaintiff. The detachable voucher attached to such check was received in evidence. This voucher stated that $1,000 was being paid "on account drilling well," and the other $54.75 was to cover acid supplied by plaintiff. Such acid had been used by the plaintiff when it acidized the old well.Thereafter, the plaintiff made repeated demands for the payment of the balance due on its account. The defendant refused to make further payment until the well was deepened so as to provide more water. Finally a verbal agreement was negotiated between the parties through their respective attorneys whereby the defendant paid a further $250 on account under date of July 21, 1952, and the plaintiff agreed to drill the well deeper. However, plaintiff did not perform such further drilling until approximately a year later when it was done between the dates of August 17, 1953, and September 18, 1953. The plaintiff submitted a further statement in the sum of $389 for the additional work done in deepening the well from 202 feet to 264 feet. The testimony is undisputed that this represented the reasonable value of such further work. The evidence adduced in behalf of the defendant was that no greater quantity of water was obtained at such lower level than at the 202-foot level, and that the water was cloudy and muddy.
The defendant, being unsatisfied with the amount of water produced by the well as so deepened, refused to make further payments and plaintiff instituted the instant action to recover the $1,205.10 balance due under the original contract, and the $389 due for additional services and materials in deepening the well, together with interest.
The action was tried to the court without a jury. After the conclusion of the trial a short memorandum opinion was filed by the trial judge. In such opinion it was determined that the plaintiff under the original contract did not guarantee any specific capacity of the well and that there had been acceptance of the well by the defendant. In support of such determination of acceptance on the part of the defendant, the $1,000 payment made February 1, 1952, was stressed. Formal findings of fact and conclusions of law were subsequently entered in conformity with the memorandum opinion, which allowed recovery for the $389 of additional services and materials on the basis of quantum merit.
Judgment was rendered in behalf of the plaintiff and against the defendant under date of December 28, 1956, for the total sum of $2,228.16, including interest and costs. From such judgment the defendant has appealed.
The brief of the defendant states the questions to be determined on this appeal to be:
(1) Did the plaintiff fulfil its contract?
(2) If the plaintiff did not fulfil the contract, did the defendant so conduct itself so as to waive such fulfilment?
With respect to the first question, it is defendant's contention that the contract required the plaintiff to continue drilling operations until " sufficient water" was obtained, and the plaintiff has breached the contract by not doing so. Genni v. Hahn (1892), 82 Wis. 90, 51 N.W. 1096, is cited as authority holding that plaintiff cannot recover if it committed such breach.
It is defendant's further position that the term "sufficient water" appearing in the contract is ambiguous and subject to explanation by parol testimony. Defendant's counsel attempted to have Wauer, president of the defendant, testify as to a conversation had between him and Milaeger, president of the plaintiff, at the time the parties were negotiating the contract of October 1, 1951. The defendant sought thereby to establish that the parties had verbally agreed upon a definition of what was intended by use of the words "sufficient water." The trial court sustained an objection to the question inquiring as to such conversation between the parties on the ground that to admit such testimony would violate the parol-evidence rule. The defendant then made an offer of proof to the effect that Wauer would have testified that the parties before the contract was entered into agreed that the term "sufficient water" in the contract meant a minimum of 50 gallons per minute of usable water.
We are satisfied that the trial court committed error in excluding such offered testimony. If a contract is ambiguous, the declarations of parties constituting the negotiations for the contract may be resorted to in aid of construction without violating the parol-evidence rule. Wheelwright v. Pure Milk Asso. (1932), 208 Wis. 40, 44, 240 N.W. 769, 242 N.W. 486. Such error, in view of the precedent of Genni v. Hahn, supra, would be prejudicial and require a new trial unless the appeal can be decided in plaintiff's favor on the second issue of waiver.
In passing on the question of whether or not the defendant by its acts effectively waived any defective performance on the part of the plaintiff, it is necessary to review the pertinent evidence bearing on this issue.
Drilling operations were commenced by the plaintiff on November 8, 1951, and, on January 8, 1952, the same were discontinued after a depth of 202 feet had been reached. The next day a bailer test was run. This disclosed that the water present was "cloudy and a bit muddy." This is usually the condition of the water at the start of opening up a new well. Milaeger then telephoned to Wauer and informed him "It looks like we got a well," and Wauer requested that the test by pump be run.
It was agreed between the parties that a screen should be put into the bottom of the well. This consisted of pipe six inches in diameter and 28 feet eight inches in length having holes perforated in it. Such screen was an "extra" not covered by the contract, and the $67.50 and $17.60 items in plaintiff's first statement rendered in the sum of $2,205.10 covered the same. Such screen was placed in the well on January 11, 1952, and on the same day the plaintiff attached its pump and ran the test. Such test disclosed that the well had a capacity of from 20 to 30 gallons per minute. Milaeger then offered to "develop" the well so as to get the cloudiness and sand out of the water at a cost of $10 per hour. Wauer refused such offer and stated that he would grout the well and "develop" it with his own pump.
Milaeger, however, admitted on his adverse deposition taken before trial that Wauer was not then satisfied with the capacity of water produced by the well as disclosed by the test. The plaintiff removed its equipment from defendant's premises on January 14, 1952, and on the same day mailed to the defendant its statement in the sum of $2,205.10, a copy of which appears in the statement of facts preceding this opinion.
The defendant possessed a turbine pump having a pumping capacity of 90 gallons per minute. The defendant had its maintenance man, one Willms, drop 120 feet of pipe, with a 10-foot "tailpiece" attached, into the well and connect the same to this turbine pump. Willms gave contradictory testimony as to how he operated such pump. While an adverse witness called by the plaintiff, he testified that he "opened" the pump up to capacity. Later, when called as defendant's witness, he stated that he operated the pump very slowly. Willms operated the pump until it broke suction as a result of there being no more water in the well at the depth reached by the pipe attached to the pump. Then the pump was primed again and the pump operated very slowly so as not to exceed the capacity of the water present. The capacity of the well was found to be no more than 20 to 30 gallons per minute.
These pumping operations were performed by Willms in January, 1952. Nevertheless, in spite of both the pump tests made by plaintiff and Willms disclosing a well capacity of 20 to 30 gallons per minute, the defendant made its $1,000 remittance on account on February 1, 1952, by mailing a check for that amount to the plaintiff. Such check was not accompanied by any letter stating any reservation of rights against the plaintiff. Neither did the detachable voucher attached to such check contain any reservation whatsoever.
We consider that the instant appeal is clearly ruled by our decision in Guschl v. Schmidt (1954), 266 Wis. 410, 417, 63 N.W.2d 759, wherein it was stated:
"While a partial or total payment on a building contract does not constitute an acceptance of the work in so far as latent defects are concerned, such a payment by the owner with knowledge of a particular defect does constitute a waiver of such defect in the absence of any other circumstances mitigating against such a waiver."
The brief of the defendant concedes that the foregoing is a correct statement of the applicable principle of law. However, it argues that there are mitigating circumstances here present which prevent the $1,000 payment on account from constituting a waiver by the defendant of its right to claim that plaintiff had breached its contract by not drilling the well to a depth where "sufficient water" had been obtained. Such mitigating circumstances are alleged to consist of "frequent" statements by Milaeger that the well could be "developed" to produce sufficient silt-free water.
The evidence does not bear out such contention. Milaeger testified that the reason why Wauer insisted in the summer of 1952 that the well be drilled deeper was not because Wauer was dissatisfied with the capacity of the well, but rather due to the fact that the well had become clogged by sand as a result of Willms operating the turbine pump at too high a speed contrary to Milaeger's instructions. Milaeger further testified that Wauer's refusal to make further payments on account because of insufficient water was "long" after the defendant had "messed it up" with its turbine pump.
On the other hand, Wauer testified that, after the turbine pump became clogged with sand while Willms was operating it, Wauer called Milaeger and complained, and Milaeger came out to defendant's plant. Wauer stated that Milaeger then said that defendant had to "develop" the well. Wauer then asked, "How you going to develop a hole of sand where there ain't no water?" To this, Wauer testified Milaeger replied that water was there and it could be developed with the use of a sand screen costing $450. Wauer then inquired if the plaintiff would guarantee water if such a screen were installed. According to Wauer, Milaeger refused to give such guarantee. Wauer concluded his summary of the conversation by testifying, "Well I said there ain't no water. I ain't going to pay any more."
Wauer did not in his testimony fix the date of this conversation except to testify it was after the accident with the turbine pump. Such accident was the choking of the pump by sand. However, the above-quoted sentence from Wauer's summary of such conversation definitely establishes the date of the same as being after the $1,000 payment of February 1, 1952. This is because Wauer's statement that he was not going to pay " any more" necessarily implies that he had already paid something to the plaintiff. The first payment that defendant made to the plaintiff was the one in the sum of $1,000 made February 1, 1952.
We, therefore, conclude that the record discloses no mitigating circumstances existed as of February 1, 1952, when such $1,000 payment was made. The making of such payment without any attempted reservation of rights, constituted a waiver by the defendant of any breach on the part of the plaintiff based upon the insufficiency of the water obtained at the 202-foot depth to which the well had then been drilled. This determination disposes of plaintiff's cause of action for the balance due on the original contract for drilling the well to the 202-foot depth.
The trial court by its findings of fact determined that the services rendered and materials furnished by plaintiff in 1953 in deepening the well were performed at the special instance and request of the defendant; that the defendant agreed to pay therefor; and that the reasonable value of such services and materials was $389. Such findings must stand on this appeal if not against the great weight and clear preponderance of the evidence. The testimony of Milaeger, president of the plaintiff corporation, fully substantiates such findings.
By the Court. — Judgment affirmed.