Wilkins v. Bailey Engineering Co., Inc.

Citations: 91 A.2d 98; 21 N.J. Super. 227

Court: New Jersey Superior Court; August 28, 1952; New Jersey; State Appellate Court

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The case involves W. Burdette Wilkins (plaintiff-respondent) and Bailey Engineering Co. Inc. (defendant-appellant) concerning a contract for the design and manufacture of molds for insulated shipping containers. The Superior Court of New Jersey's Appellate Division reviewed an appeal from a final judgment in favor of Wilkins, awarding him $1,687.70 in damages and costs, with the jury initially finding for him in the amount of $1,580 plus interest from October 10, 1950. 

The contract, established on August 14, 1950, stipulated a fixed price of $1,800 for the project, along with an additional fee of 50 cents for each shipping container produced. A written memorandum dated September 15, 1950, referred to in the complaint, was submitted as evidence. Wilkins claimed that the defendant defaulted on the agreement, which hindered his ability to perform, and sought damages based on the value of his services and materials supplied, totaling $2,350, after crediting a $400 payment from the defendant. 

The plaintiff's amended complaint consisted of three counts: the first count asserted a breach of contract and sought damages based on the value of services and materials; the second count claimed damages under quantum meruit; and the third count requested an accounting for the containers produced, which was abandoned during the trial. Ultimately, Wilkins demanded damages of $1,950 in the first two counts. The jury found in his favor while dismissing the defendant's counterclaim.

The first count of the amended complaint alleges a verbal agreement for a fixed price of $1,800, but the plaintiff seeks damages based on the value of services rendered instead of the contract price. The defendant acknowledges that an agreement was reached following negotiations, as shown in a written memo dated September 15, 1950 (Exhibit P-1). However, the defendant denies that the plaintiff fulfilled the contract's terms and claims that the contract was never modified post-September 15, 1950. The defendant advanced $400 towards the contract but counterclaims for that amount due to the plaintiff’s alleged breach, as well as an additional $600 for labor and materials provided at the plaintiff’s request.

The defendant contends that the trial court erred by allowing the plaintiff to testify about pre-memo negotiations, arguing that the written memo constitutes the definitive agreement and that the plaintiff’s testimony altered its terms, contrary to established legal precedent. The plaintiff testified that negotiations occurred before August 14, 1950, and that the written memo included both future work and prior completed work. The court permitted this testimony despite objections, allowing the jury to determine the actual terms of the agreement. The written memo appears to be comprehensive regarding the plaintiff's obligations, including details about the molds to be designed and manufactured, the quantity, price, and delivery date.

The plaintiff's testimony indicated that discussions regarding the job and its terms occurred prior to the written memo dated September 15, 1950, labeled Exhibit P-1. The trial court improperly allowed this oral testimony despite the defendant's objections, violating legal principles that prevent oral evidence from altering or contradicting a complete written agreement unless fraud or illegality is present. 

The defendant further contended that the trial court incorrectly instructed the jury on damages. The jury was directed to award the plaintiff the remaining balance of the contract ($1,800 minus a $400 advance) plus $180 for additional materials, totaling $1,580, including interest. The written agreement specified that the plaintiff was to create 24 molds for a total price of $1,800, but did not state the payment terms, implying payment was contingent upon full contract performance. 

The plaintiff argued he was hindered from completing the contract due to the defendant's fault. However, legal precedent dictates that damages should reflect the proportionate value of the work completed and potential profits from work not performed. Since the plaintiff did not fulfill the contract, the trial court erred in allowing a damages award based on the full contract price. Consequently, both the plaintiff's judgment and the judgment against the defendant on its counterclaim will be reversed, and a new trial will be ordered.