Case ID: misc_78/html/0410-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Page, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The Hanover Building Company, Respondent, v. Solomon Jacobs, Appellant.
    (Supreme Court, Appellate Term, First Department,
    December, 1912.)
    Contract — made under mutual mistake — action for breach — recovery of deposit — money had and received.
    Where, by a contract for the sale of land to plaintiff’s assignors, defendant agreed to loan a certain sum to be advanced in instalments during the construction of two buildings in -accordance with plans to be prepared, the construction of the buildings in exact compliance with the terms of the contract was a necessary condition thereof and unless such construction was possible neither party is bound to complete the contract; and, where it appears that from said plans the buildings could not be erected in compliance with the tenement house and building laws, the most that could be urged was that the contract was entered into through a mutual mistake, and a judgment for plaintiff in an action to recover damages for a breach thereof cannot be sustained on any theory While plaintiff, in an action for money had and received, might recover the amount of his deposit made on the execution of said contract, he could not recover his expenses.
    Appeal from a judgment of the City Court of the city of Hew York, entered in favor of the plaintiff for the suit of $953.13 damages and costs, upon the verdict of a jury.
    Paul Hellinger (Benjamin Levenson, of counsel), for appellant.
    J. A. Seidman, for respondent.
   Page, J.

This action was brought to recover damages for breach of contract. The facts are that the defendant and the plaintiff’s assignors entered into a contract for the sale of land by the defendant to the plaintiff’s assignors, in which the defendant agreed to make a building loan of $45,000 to be advanced in instalments during the construction of two five-story buildings, in accordance with plans to be prepared, each building to contain sixteen rooms on each floor, excluding the bath rooms, and excluding the finished basement for the janitors’ apartments. It developed when plans were prepared that such houses could not be erected in compliance with the tenement house and building laws. That it would either be necessary to build retaining walls on adjoining property, or so reduce the size of the house that the required number of rooms could not be placed on each floor, or omit the quarters for the janitor in the basement. Several adjournments were had to allow the obtaining of consents to be allowed to build the retaining wall. But failing in this the parties met on February 24, 1911, at the office of the defendant’s attorney, and the attorneys representing the parties dictated to a stenographer their respective offerings and demands, from which it appears that the defendant was unwilling to make the loan of $45,000 unless the purchasers agreed to finish the basement suitably for janitors’ apartments as required by the contract, or offered to deduct from the loan the sum that would be required to so finish the basement, or he was willing to deliver the deed on receipt of the price for the lots and not make a loan. The plaintiff’s assignors offered to take the deed if 'defendant would make the loan and waive the requirement as to a finished basement. Or they were willing to take the deed of the lots without a loan and pay therefor a reasonable price for the lots without a loan, to be ascertained either by appraisal or by deducting an amount that would equal the rates that are usually charged for building loans in connection.with the sale of lots. It was conceded that the plaintiffs were ready, willing and able to pay the balance of the purchase price and that the defendant had an executed deed and a bond and mortgage for $45,000 present and that no objection was made to the forms thereof. It thus appears that the construction of a building in exact compliance with the terms of the contract was a necessary condition in the contract, and, unless this was possible, neither party was willing to complete the contract. This was rendered impossible by the provisions of the tenement house and building laws. The complaint is framed upon the theory of an action for damages for breach of the contract, but it seems that under the circumstances which developed, owing to a mutual mistake, neither party was able or willing to perform the original agreement. There is no question but that the lots agreed to be conveyed were of the size specified in the contract. We see no theory upon which the judgment can be sustained. The alleged representation was an expression of opinion as to the correctness of which the plaintiff’s assignors, who were builders, were as competent to judge as the defendant. The most that can be urged is that the contract was entered into through a mutual mistake. Plaintiff’s counsel argues in his brief that the judgment should be either affirmed or reduced to $500, and, as modified, affirmed on this theory. But that is an entirely different form of action with an entirely different measure of damage. The plaintiff could sue to recover the $500 paid on the execution of the contract as money had and received, but he could not recover for his expenses.

The judgment will, therefore, be reversed and a- new trial granted, with costs to appellant to abide the event.

Lehman and Hotchkiss, JJ., concur.

Judgment reversed and new trial granted, with costs to appellant to abide event.