Case ID: ad_72/html/0141-01.html
Source: Caselaw Access Project
Author: {"author": "Hatch, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Orrin D. Person, Respondent, v. Joseph A. Stoll and The Union Surety and Guaranty Company, Appellants, Impleaded with Lawrence Kelly and Others, Respondents.
    
      Mechanicsf liens—sub-contractors’ liens are not necessarily dependent on the right of their principal to recover under his contract—remedy of the principal contractor where the owner is guilty of a breach of contract — where the contractor is guilty of such breach — acquiescence on the trial in the adoption of a wrong 'measure of damages.
    
    Where the principal contractor for the erection of a building elects to rescind his contract because of an alleged breach thereof by the owner, and both the principal contractor and two sub-contractors furnishing material to him file mechanics’ liens against the building, the right of the sub-contractors to judgments foreclosing their liens does not necessarily depend upon the right of the principal contractor to maintain his lien.
    If the owner was guilty of a breach of the contract, he is liable to the material-men provided there remains due and unpaid sufficient of the contract price to discharge their claims. If the contractor was guilty of the breach and the owner completed the contract, he would still be liable to the sub-contractors if there remained, after deducting the cost of completion, sufficient of the contract price to pay their claims.
    A contractor, who elects to rescind his contract because of a breach thereof by the owner, becomes relegated to the right to recover, on quantum'meniit, the reasonable value of the work done and the materials furnished. Where, however, the action brought by him to recover the amount due to him is, without objection, tried upon the theory that the contractor is entitled to recover the contract price less the payments made to him and the expense incurred by the owner in completing the contract, the owner will be deemed to have acquiesced in the adoption of that measure of damages.
    Appeal, by the defendants, Joseph A. Stoll and another, from a judgment of the Supreme Court in favor of the plaintiff and the defendant lienors, entered in the office of the clerk of the county of New York on the 2d day of December, 1901, upon the decision of the court, rendered after a trial at the New York Special Term, decreeing the foreclosure of a number of mechanic’s, liens and directing a personal judgment in favor of each lienor against the defendant owner and his surety for any deficiency arising upon such .foreclosure.
    
      Mandéville G. Jacobus, for the appellants.
    
      Frank M: Avery, for the. plaintiff, respondent.
    
      Gilbert W. Minor, for the defendants, respondents.
   Hatch, J.:

The defendant Stoll was the owner of certain premises situate at the northeast corner of One Hundred and Seventieth street and Broadway in the borough of Manhattan. On these premises he erected a seven-story apartment house of modern character, and in connection with such erection he entered into a contract with Kelly and Waterbury, composing the firm of L. Kelly & Co., to do all the plaster work in such building. The last-named firm contracted with the plaintiff Person and the defendant Getler to furnish a part of the material necessary in the performance of their contract, which the said parties furnished. Person and Getler, not being paid in full for the material so furnished, filed liens upon the premises therefor. Kelly and Waterbury, claiming that the defendant owner had been guilty of a breach of contract, elected to rescind the same, and thereafter also filed a mechanic’s lien for the amount which they claimed to be due. and unpaid to them under the contract. This action is brought by the plaintiff Person to foreclose his lien, and he made as parties thereto the subsequent lienors, Getler and Kelly and Waterbury. The defendant owners procured the lien to be discharged and an undertaking was given thereon as required by law by the Union Surety and Guaranty Company, and such company was, therefore, made a party defendant in the action. The amount due to the plaintiff for which he filed his lien was undisputed, and the amount for which the defendant Getler filed his lien was proved, so that as to those two lienors they became entitled to a decree of foreclosure of their liens and for a personal judgment against the owner and surety company, unless they be defeated therein by virtue of other considerations.

It is claimed by the appellants that such .claims are so defeated for the reason that the right of the claimants to a judgment of foreclosure and sale and for the deficiency judgment depends upon the fact of the right of Kelly and Waterbury to maintain their right to a lien. We do not think that such result necessarily follows. The trial court found, and as we think upon sufficient evidence for that purpose, that there was a substantial performance by Kelly and Waterbury of their contract and that the defendant owner was guilty of a breach of the contract. Under such circumstances the defendant owner became liable for the payment of the claims of the material-men, if there remained due and unpaid sufficient of the contract price to discharge such claim, and this would be so even though there were a breach of contract upon the part of Kelly and Waterbury and the defendant owner had gone on and completed the building, if., under such circumstances, there remained a sufficient part of the contract price undisposed of to pay the same, deducting therefrom the cost of completion of the contract. (Mack v. Colleran, 136 N. Y. 617.) In the present case the evidence tended to establish and the court found that the cost of performance of the contract at the time when Kelly and Waterbury elected to rescind the same was only the sum of sixty-four dollars, and the amount due and unpaid thereon was more than sufficient to discharge the lien of Person and Getler, consequently these parties are clearly entitled to the judgment which has been rendered in their favor, even though Kelly and Waterbury ought to have been defeated in the claim which they made. It follows, therefore, that so far as Person and Getler are concerned the decree and judgment should be affirmed.

The rights of Kelly and Waterbury rest upon different considerations. By the answer which they interposed, and which is to be treated as the complaint as between the owner and surety and themselves, so far as is material, there is set up the contract to do the plastering work and furnish the material at an agreed price of $10,164. It then avers that they proceeded with the work and furnished the materials as provided by the contract and that there was due and owing to them over and above all payments made the sum of $2,070.75, and that they also performed extra work to the value of $200.25, for which they have not been paid. They further aver that they did not perform all the work and labor or furnish all of the material for the completion of .the contract for the reason that the owner failed and neglected to perform his part of the contract by refusing to pay in accordance with its terms; that they then elected to and did rescind such contract, filed their lien for the unpaid balance and the extra work and services, and asked judgment for the foreclosure of their lien and a personal judgment for any deficiency. The answer of the defendant Stoll and the surety company put in issue these allegations of the answer.

As we have before observed, the court found upon sufficient evidence to sustain the findings that Stoll and Waterbury substantially performed their contract according to its terms, and in order to complete the same the owner was only required to expend therefor, the sum of sixty-four dollars. It is evident from the averments contained in the' answer of Kelly and Waterbury that the contract price no longer furnished the measure of the sum which they were entitled to recover as against the defendant owner and the surety company. When they elected to rescind their contract they were remitted in their right to recover on the basis of a quantum meruit for the reasonable value of the work done and the materials furnished. (Fox v. Davidson, 36 App. Div, 159.)'

. It was within their right to perform the contract and then bring their action to recover the contract price. (Wharton & Co. v. Winch, 140 N. Y. 287.) 'They cannot now, however, avail themselves of this rule, as they elected to rescind, and, therefore, became relegated as matter of strict right to alone recover upon the basis of a quantum meruit.

It is the claim of the appellant, and such contention is supported by the facts appearing in the record, that there was no evidence which proved or tended to prove, aside from the contract, what was the reasonable value of the work, labor and services and materials furnished, which were done by Kelly and Waterbury.

The course which the trial took upon this subject was somewhat novel. Kelly and Waterbury, to make out their case, proved the contract in which the contract'price appeared and the-installments to be paid as the work progressed: They then proceeded to prove the amount and number of payments falling due, the failure of the defendant owner to make payment as the contract required, the sums paid under the terms of the contract, the notes given in part payment by the defendant owner and the amount received upon such notes, and, taking all of the payments together and the amount realized upon the notes and deducting the aggregate sum from the contract price agreed to be paid, they claim to have arrived at the amount represented by their lien and thereby established the sum for which they were entitled to a decree of foreclosure and for the deficiency judgment. The claim for extra work is excluded in this case, as the court disallowed such claim, and properly so, we think. In any event no appeal has been taken which involves such question ; it is needless, therefore, to consider it. The court, in arriving at its conclusion, adopted these figures, deducted therefrom the sum of sixty-four dollars and awarded the decree and judgment for the balance.

It is evident, therefore, that this proceeding did not conform with the requirements of the law governing such subject. Although the appellant calls our attention to this error and makes it the basis upon which he asks for a reversal, it is clearly evident that he is in no position to take advantage of it. During the whole course of the trial there was not a suggestion upon the part of the defendant owner or the surety company that such evidence did not measure correctly the sums which the contractors were entitled to recover, nor was it hinted that the proof was improper in establishment of the contractor’s claim.

They must be held, therefore, to have acquiesced in the measure of damages which the proof tended to establish and the competency of the testimony adduced in its support. It is well settled that parties may, either by express stipulation or otherwise, agree upon a rule of damages to be applied in a particular case, and, where proof is received and the trial conducted with respect to an erroneous rule the parties will be held to have acquiesced in its adoption and thereby it becomes the law of the case. (Lahr v. Me El. R. Co., 104 N. Y. 268.)

Consequently, the defendant owner is estopped from insisting upon what might have been erroneous testimony in the establishment of the contractors’ cause of action, and his right of recovery. A motion was made to dismiss as to Kelly and Waterbury at the close of their proof, but the question now sought to be raised was not suggested. At the close of the case the motion to dismiss was renewed, upon the same ground, and it was then suggested that substantial performance of the contract had not been pleaded, which was their proper plea, and that they had failed to prove a case or show right to recover. The court remarked that no evidence had been offered of the value of the work done, but he denied their motion. . -

Parties will not be permitted to lie by and try a case upon an erroneous theory without suggesting that any error is being committed or raise such question by proper objection, and then, after the case has been entirely tried, attempt to avoid the result by moving for a dismissal of the complaint. It is clearly evident in this case that the proof offered and the damages proved were arrived at in such ■ form and manner as permitted of administering equal justice to both parties. Had the contractors continued with the performance of their contract they would have been entitled to recover the contract price, less payments made and the cost of its completion. The payments in this case were all deducted by the court as was also the cost of completion of the contract, and the difference was the sum under the rule adopted to which the contractors became entitled and for which they have been awarded judgment.

No injustice could possibly arise to either party hereto out of the application of such a rule. The defendant having acquiesced in the proof throughout the whole trial, it became the duty of the court to amend the complaint so as to conform to the proof, and this is in effect what was done, and for the purpose of supporting the judgment this court will now do what ought to have been done in this respect upon the trial. There is a further claim that the contractors at no time procured any architect’s certificate for which the contract provided. The proof was abundant, however, to show that all of the parties waived performance in this respect, and the court has so found.

The judgment should, therefore, be affirmed, with costs to the plaintiff and to the defendants Gretler and Kelly and Waterbary.

Van Brunt, P. J., O’Brien, Ingraham and McLaughlin, JJ.,. concurred.

. Judgment affirmed, with costs to plaintiff and to the defendants G-etler, Kelly and Waterbury. . .