Case ID: ny-st-rep_54/html/0705-01.html
Source: Caselaw Access Project
Author: {"author": "Peckham, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Tom L. Johnson et al., App’lts, v. The Atlantic Avenue Railroad Co., Resp’t.
    
    
      (Court of Appeals,
    
    
      Filed October 10, 1893.)
    
    Reference—Lone account—Breach of,contract.
    An action to recover unliquidated damages for a breach of a contract for the lease of a railroad franchise, by which the lessor was to procure the necessary consents to the building of the road, by reason of which the expenditures made by the lessees towards the construction of said road were rendered useless and the enterprise became abortive, is not one in which a reference can be compelled. Such expenditures, though represented by numerous vouchers, are nothing more than different items of alleged damage to be recovered of defendant by reason of its violation of the contract, and do not make the action one involving the examination of a long account, within the meaning of the statute as to references.
    Appeal from order of the supreme court, general term, second department, reversing order of special term denying defendant’s motion for an order of reference.
    Action to recover for breach of contract. Defendant leased to plaintiffs certain of its franchises, and the latter covenanted to construct thereunder and operate certain lines of railroad and pay a certain portion of the earnings to defendant. Defendant under the contract was to obtain the necessary consents to the construction and operation of said roads, which it failed to do.
    
      James C. Church, for app’lts; B. F. Tracy, for resp’t.
    
      
       Reversing 51 St. Rep., 188.
    
   Peckham, J.

The order of the general term in this case is, as we think, clearly wrong. The complaint shows that the action is one where a reference cannot be compelled. It is an action to recover from defendant unliquidated damages for its violation of the contract entered into by the parties thereto.

The complaint alleges that in order to enable plaintiffs to fulfill their contract it was necessary for them to expend large sums of money in the purchase of real estate, machinery, cars, horses, hiring employes and other expenses of construction for said railroad, and that by reason of defendant’s breach of the agreement and its failure to obtain the consents spoken of in the contract, the enterprise contemplated by the agreement became abortive, to the plaintiffs’ damage in the sum of $300,000. There is no statement in the complaint that these expenditures were made by them as the .agents of the defendant, nor is there anything therein from which it can be inferred that they were so made, or that the claim for damages is based upon the difference between the expenditures made by plaintiffs as agents of the defendant, and the amounts received by them as such agents upon the sale of any of the property thus purchased.

The complaint states, in substance, that these expenditures were made by the plaintiffs in preparation and as a means for the fulfillment of their obligations to build the road, and that such expenditures became useless by the violation of the contract by the defendant. Whether these various amounts so expended are valid claims and furnish the true rule of damages to be applied in this case against the defendant on account of its violation of the contract, need not now be decided or discussed. In no event are they anything more than different items of alleged damage, to be recovered from defendant by reason of its violation of the contract, and they do not make the action one involving the examination of a long account, as that expression is used in the statute as to references. Within that statute no case for a reference is made out. Camp v. Ingersoll, 86 N. Y., 433; Untermeyer v. Beinhauer, 105 id., 521; 8 St Rep., 1.

The order of the general term must be reversed and that of the special term affirmed, with costs to the plaintiffs in all courts.

All concur.