Case ID: ny-st-rep_9/html/0211-01.html
Source: Caselaw Access Project
Author: {"author": "Potter, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Philip Brady Resp’t, v. The Mayor, Aldermen and Commonalty of the City of New York, App’lts.
    
      (Supreme Court, General Term, First Department,
    
    
      Filed May 13, 1887.)
    
    1. Contract—Effect of recission of—No provisions survive except THOSE SPECIALLY AGREED ON.
    This action was brought to recover compensation for work performed under a contract. By the terms of the contract, it was provided that in event of certain contingencies arising, the defendant should have the power to direct the plaintiff's assignor to discontinue any further work under said contract, and that they might proceed themselves and complete the work, or relet it to another, and to charge any excess of expense over the original contract price consequent on so doing to the original contractor, and deduct the same from any sums due him. It was further-agreed that the work should be done in a time agreed upon, and for each day beyond the period allowed during which the work should remain in an unfinished state, a certain sum was to be deducted by the defendants from the sum due the plaintiff. The defendants, after the work had proceeded for some time, directed the plaintiff’s assignor to stop and relet the work to another, stipulating that he should have a certain time within which to finish it: Meld, that the defendants having annulled the original contract, and let the work to another under a new agreement, none of the provisions of the original contract remained in force except those kept alive by express agreement
    2. Same—New contract—Effect upon original contract.
    
      Held, that the defendants having, by express agreement with the party with whom the latter contract was entered into, allowed him a period of time in which to complete the work in excess of that stipulated for under the original contract, could not in this action he allowed to deduct from the sum due the plaintiff's assignor for compensation the sum originally agreed upon for delay in the completion of the work.
    
      L. Lajlin Kellogg, for resp’t; E. Henry Lacombe, corporation counsel, for app’lt.
   Potter, J.

This is an appeal from a judgment entered upon a verdict directed by the justice at circuit for the sum of $4,700.77. The controversy arose out of a contract between the defendant and plaintiff’s assignor in relation to regulating and grading, etc., One Hundred and Twelfth street between Seventh and Eighth avenues, in the city of New York. It appeared' from the evidence upon the trial that the contract between the parties, among numerous provisions and stipulations, contained a provision that in any or all of several contingencies the defendant should have the power to direct the plaintiff to discontinue any further work under said contract, and for the defendant thereafter to proceed and complete the work or to relet the work to another and to charge any excess of the expense of so doing to the original contractor, and to deduct the same out of any moneys that then or thereafter might be due to the contractor under the original agreement.

The original contractor performed • work under the contract from the date of the contract, October 23, 1882, till some time in January; 1884, when the contract was terminated by the defendant and thereafter, on the 20th of May, 1884, another contract for the completion of the work was entered into between the defendant and Patrick Farley, pursuant to the original contract for that purpose, and the work was completed by the latter under the new contract.

It was also agreed that the contractor should complete the work in two hundred and seventy-five days, besides certain specified days not to be computed, and further, that the said party of the second part hereby further agrees that the said parties of the first part shall be and they are hereby authorized to deduct and retain out of the moneys which may be due or become due to the said party of the second part under this agreement, as damages for the non-completion of the work aforesaid within the time stipulated for its completion, the sum which shall accrue and become due for the inspector’s wages, for the time not hereinbefore excepted, after the expiration of the time stipulated for the completion of the work.

The contract contains other provisions in relation to damage's for violation of the contract by the contractor and allowing the defendant to retain the same out of moneys due or to grow due under the contract. There is also this provision in the contract, to wit: that “the said party of the second part hereby further agrees that the said parties of the first part shall be and they are hereby authorized to deduct and retain out of the moneys which may be due or become due to said party of the second part under this agreement, as damages for the non-completion of the work aforesaid within the time hereinbefore stipulated for its completion, the sum of fifteen dollars for each and .every day the aggregate time of all the inspectors employed upon said work may exceed the said stipulated time for its completion.

Upon the trial the defendant sought to be allowed in reduction of the plaintiff’s claim, the amount of the damages at the rate specified in that provision of the contract, viz., fifteen dollars a day for the number of days employed upon the work beyond the number specified in the contract for the completion of the work. These damages, the defendant claimed, should be allowed without other proof than the fact that the contract was not completed within the time specified for that purpose in the original contract.

The learned justice overruled the defendant’s contention and directed a verdict for plaintiff regardless of any claim for damages under the provision of the contract.

Was the direction of the trial judge in this regard erroneous ?

From the general structure and provisions of the contract under consideration it is pretty plain that while the plaintiff’s assignor was to undertake the performance of the contract and to complete it in a specified time and manner, yet the defendant had the right in certain contingencies to annul the contract and complete it or to let it to another to complete. The defendant chose the latter and let the work to another under a new contract containing other and different provisions, notably as to the prices of the work; and as to time within which the work was to be completed. The defendant having annulled the original contract, as it had the unquestionable right to do, the plaintiff’s assignor had no further right to continue the work under that contract. None of the provisions of the contract thus annulled herein, were in force or operative upon the parties to it, except such of them as were kept in life by the express terms of the old contract after the new one was made by the defendant, for the completion of the work.

These were, that if the defendant got the work completed for less than it had contracted to pay plaintiff’s assignor for it, he should receive the difference; and if the defendant had to pay more for its completion than it had contracted to pay plaintiff’s assignor, lie should pay the defendant the difference.

This was a fair and equitable arrangement, as it provided that the work should be ultimately performed, and that the parties should respectively pay and receive just what had been contracted for, and all the other incidents of the original contract as means to that end were dispensed with by the new contract. I think the provision in regard to paying fifteen dollars a day under the contract between John .Brady and the defendant had been annulled by the adoption of the new in place of the original contract.

This construction of the two contracts is fully shown in the fact that in making the new contract with Farley, the defendant agreed upon another and much extended period of time. viz.: two hundred days in which Farley was to complete the work. Can it be, that the defendant can rightfully insist that Brady shall pay damages for delay in completing a contract which the defendant has taken away from him and let to another, with a stipulated extension of time for its performance ?

The claim is not only for damages from the delay attending Brady’s partial performance, but is also for the delay which the defendant expressly gave Farley for the performance of the unfinished portion of Brady’s contract.

It has generally been regarded as a complete answer to a cause of action for breach of contract, that the party thus complaining, rendered it impossible for the other party to perform it. Gallagher v. Nichols, 60 N. Y., 438.

But the defendant’s contention exceeds this by a considerable ; for he not only took the contract away from Brady but let it to another, and gave that other an express extension of time in which to perfect it.

Let us trace the working of this principle a little in another direction. Under the contract the defendant had the right to cancel it, and to finish the work itself, charging Brady with any excess in the expense of doing it.

Could it also recover of Brady fifteen dollars for its own delay in completing the work ?

I apprehend the law applicable to this class of contracts is this: That where one party to a contract has broken it in some material part, the other party to the contract may treat it as null and go on and complete the contract; or he may repair the breach by doing what is omitted or defectively done, and charge the expense of it over to the defaulting party. If he takes the former course, the contract is at an end and the party cannot recover any damages beyond those sustained when the contract was rescinded. If he take the latter course, he may recover any legitimate damage during the performance of the residue of the work. Crawford v. Becker, 13 Hun, 375 ; Murphy v. Buckman, 66 N. Y., 297-300.

Entertaining these views, I am satisfied that the direction given by the trial court to render a verdict for the plaintiff, taking no account of the fifteen dollar a day clause, was correct, and I do not deem it necessary or useful to go through the numerous and differing cases to be found upon the question, to decide whether that clause imparts a penalty, or liquidated damages. Especially as we are referred to a case by appellant’s counsel. Reilly ex. v. The Mayor, etc., (34 Hun, 628), in the general term of this department, holding that this clause in a contract like the one under consideration, imports liquidated damages and not a penalty.

Except for that case, my first impression would incline my judgment to the opposite conclusion.

Judgment should be affirmed with costs.

Lawrence, J., concurs; Van Brunt, P. J., not sitting.