Case ID: ad_95/html/0360-01.html
Source: Caselaw Access Project
Author: {"author": "McLaughlin, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Edward R. Dunham, Respondent, v. The Hastings Pavement Company, Appellant.
    
      Amendment of a complaint at the trial alleging the damages up to that date — right of an asphalt company to rescind an executory contract to pay, for the procuring of . the right to bid for asphalt block pavement in New York city, a fixed sum for each square yard laid — measure of damages of the party contracting to procure such right, arising out of its breach.
    
    On the trial of .an action to recover damages for a breach of contract, the court may allow the complaint to be amended so as to permit a recovery of the dam-, ages resulting from the breach of the contract intermediate the commencement ' of the action and the trial thereof. The court may also, at the close of the trial, permit the complaint to be amended by increasing the amount of damages claimed.
    While a contract is executory, a party thereto has the power to stop performance on the other side by an explicit direction to that effect, subjecting himself to such damages as will compensate the other party for being stopped in performance bn his part at that stage in the execution of the contract. The party thus forbidden cannot afterwards proceed with the performance of the contract and thereby increase the damages and then recover such damages from the other party.
    A corporation made a contract, by which it appointed the other party thereto, for a period of five years, its sole agent to secure the right to make bids for and introduce asphalt block pavement in the city of New York, and agreed to-.pay such agent, in- consideration for his services, fifteen cents per square yard for each yard.of block asphalt laid in the city of New York. Prior to the expiration of the five years the corporation assumed to terminate the contract.
    In an action brought by the agent to recover damages for the breach of the contract, it Was
    
      Neld, that the plaintiff could not, after the corporation had assumed to terminate ■the contract, render any services thereunder for the purpose of enhancing his damages;.
    That the measure of the plaintiff’s damages was the value of his contract, to wit,. • what he would have made if he had been allowed to perform it, and not fifteen cents for each square yard of block asphalt pavement laid in the city of New York up to the time of the trial.
    Appeal by the defendant, The Hastings Pavement Company, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the cleric of the county of New York on the 5th day 'of November, 1903, upon the verdict of a jury, and also from an order entered in said clerk’s office on the 5th day of Novemher, 1903, denying the defendant’s motion for a new trial made upon the minutes..
    
      William B. Hornblower, for the appellant.
    
      Samuel Untermyer, for the respondent.
   McLaughlin, J.:

This action is based upon a written contract by which plaintiff was appointed for the period of five years, with a right of renewal, the sole agent of the defendant to secure the right to make bids for and introduce asphalt block pavement in the city of New York. There have been two trials and two appeals. Upon the first trial the complaint was dismissed at the close of plaintiff’s case, because the contract, in the opinion of the learned trial justice, when construed in the light of the evidence, was void on the ground of public policy, inasmuch as it contemplated what is commonly called “ lobby service.” On appeal the judgment was reversed and a new trial ordered (56 App. Div. 244), and a motion for a reargument denied (57 id. 426), the appellate court holding that the contract was legal upon its face, and the performance of illegal acts under it would not invalidate it, unless it appeared that the performance of such acts was contemplated by the parties at the time the contract was made, a question which under the evidence should have been submitted to the jury. Upon the second trial the validity of the contract, with other questions, was submitted to the jury; the plaintiff had a verdict for $76,567.12, and from the judgment entered thereon defendant has appealed.

The complaint as originally framed, and upon which the first trial was had, contained two causes of action, one for services rendered under the contract amounting to $9,877.61, and the other for damages, amounting to $4,076.70, for a breach of the contract. At the beginning of the second trial the second cause of action was amended by setting out the contract at length, and specifying certain particulars in which there had been a breach, by reason of which a claim for damages was made amounting to $54,076.70, and at the conclusion of the trial this' cause of action was further amended by claiming damages amounting to $70,000.

The judgment appealed from is attacked principally upon three grounds, which will be considered in the order named: (1) That the contract, when construed in the light of all the evidence, is invalid in that it contemplated the rendition of illegal services in getting resolutions passed by the board Of aldermen, and for that reason the complaint should have been dismissed at the close of the trial or a verdict directed for the defendant ; (2) that the court erred in permitting the amendment of the complaint, in that a new cause of action was inserted therein ; and (3) that erroneous rulings were made and an improper measure of damages adopted by the trial court.

First. It was determined upon the former appeal .that the contract was .valid upon its'face, and an examination of the evidence, bearing upon the services. rendered or to be rendered under or in pursuance of it, shows it to be substantially the same as that given upon the former trial. If I am correct in this, then it necessarily follows, under our former decisión, that the trial court did not err at the close of the trial in denying defendant’s motion to dismiss the complaint or direct a verdict in its favor, but that the question was properly submitted to the jury to pass upon the validity of the contract. The jury found the contract valid, the finding is supported by the evidence, and ought not on that ground to be disturbed.

Second. The court had the power to grant the amendment which it did. This amendment did not import into the complaint a new cause of action. The second cause of action set out in the complaint, before the amendment, was for damages for the breach of the contract, and this is precisely what it was after the amendment. The change' was to permit a recovery for damages which it was alleged had been sustained by the plaintiff for a breach of the contract intermediate the commencement of the action and the trial. That a complaint to recover damages for a breach of contract may be thus amended seems clear. (Behrman v. Linde, 1 Silv. Sup. Ct. 459, 465 ; S. C. affd., 127 N. Y. 672 ; Wilcox v. Executors of Plummer, 4 Pet. 172.) The contract having been broken at the time of the ¡ commencement of the action plaintiff had a right to recover all of the damages which lie had sustained by reason of the breach to' the time the trial was had. He could not include in the original complaint damages which might thereafter accrue, inasmuch as they would then he so problematical that the same would not be susceptible of proof, but when the trial occurred the damages which had theretofore been problematical had become fixed, definite, and could be established with as much certainty as those specified in the original complaint. The defendant did not ask for a postponement of the trial on the ground of surprise, and it is apparent from the record that it was not surprised and could not have been injured by the amendment. Nor was there any error in increasing the amount of damages claimed at the close of the trial. That such amendment can be made has frequently received the approval of both this court- and the Court of Appeals. (Knapp v. Roche, 62 N. Y. 614; Dakin v. Liverpool & L. & G. Ins. Co., 13 Hun, 122; affd., 77 N. Y. 600; Zimmer v. Third Ave. R. R. Co., 36 App. Div. 265 ; Clark v. Brooklyn Heights R. R. Co., 78 id. 478.)

Third. The claim that an improper measure or rule of damage was adopted presents a more serious question. The action, as already indicated, was to recover, first, for services rendered under the contract, and, second, damages for its breach. The measure of damage under the first cause of action is that specified in the contract as modified by parol, viz., fifteen cents per square yard of the asphalt laid, but, manifestly, that is not a proper measure of damage for a breach of it. On the 3d of March, 1897, the defendant notified the plaintiff in writing that it terminated the contract. The plaintiff protested against such termination and insisted that he would hold the defendant liable “ for a commission on every yard of pavement laid in the city of New York, as provided for in the said contract.” But this did not prevent a termination of the contract or give to the plaintiff the right to have his damages measured by the contract as though he had fully performed on his part. The defendant, if plaintiff’s contention be correct, had no right to terminate the contract, but notwithstanding it did not have the right it had the power to do so, which it illegally exercised, and for which the law steps in and compensates the plaintiff in damages. The general rule is that while a contract is executory a party has the power to stop performance on the other side by an explicit direction to that effect, subjecting himself to such damages as will compensate the other party for being stopped in performance on his part at that stage in the execution of the contract. The party thus forbidden cannot afterwards go on and thereby increase the damages and then-recover such damages from the other party. (Butler v. Butler, 77 N. Y. 472; Danforth v. Walker, 37 Vt. 239; Gibbons v. Bente, 51 Minn. 499; Collins v. Delaporte, 115 Mass. 159; Bish. Cont. [Enlarged ed.] § 837; 1 Suth. Dam. [3d ed.] § 113.)

The defendant having this power and having exercised it the contract was at an end, and plaintiff could not thereafter render any services under it for the purpose of enhancing —or resort to its provisions as definitely fixing — his damage. The contract, it will be remembered, as modified by parol, provided the plaintiff should be the sole agent of the defendant, and for the services rendered by him should receive fifteen cents per square yard for every yard of block asphalt laid in the city of New York, and as establishing the damages sustained he proved the number of yards of pavement which the defendant had laid in the city of New York to the time of the. trial, and the court, charged that his measure of damage was fifteen cents per square yard on all the pavement laid. This was excepted .to and the court was requested to charge that the measure of damage was what plaintiff would probably have earned if the contract had not been terminated, which was refused and an exception taken. The result of these rulings was that the plaintiff was permitted to recover fifteen cents per square yard on all the asphalt laid, and this -irrespective of whether he rendered any service under the contract or could. have procured the same amount to be laid. The contract required the plaintiff to devote his entire time and use his best efforts to procuring contracts from the city. Manifestly, if the defendant, after the contract -was terminated, put forth extra efforts and thereby procured contracts which the plaintiff could not have procured — had the one in question not been broken—he was not entitled to the benefits derived therefrom. He was no more entitled to such benefits ■— if there were any — than he was to be deprived of his damage if defendant had not secured any contracts at all. He was entitled to recover the value of his contract. ( Wakeman v. Wheeler & Wilson Mfg. Co., 101 N. Y. 205; Peltz v. Eichele, 62 Mo. 171; Wells v. National Life Assn. 99 Fed. Rep. 222; Hitchcock v. Knights of Maccabees, 100 Mich. 40. See, also, note in 53 L. R. A. 33, and cases cited.) The value of his contract is what lie would, have made by performance. This is precisely what he was legally entitled to and what he morally ought to have, and as bearing Upon that question it. was competent to show what he made prior to the breach of the contract, as well as what was done by the defendant subsequent to it; in other words, the acts of both parties involved in Or connected with the subject-matter of the contract, both before and subsequent to the breach, are proper facts to lay before the jury to enable it to determine what the contract was actually worth to the plaintiff.

The case was not tried upon this theory; it was submitted to the jury under erroneous instructions as" to the law, and it follows that the judgment and. order appealed from must be reversed and a new trial ordered, with costs to the appellant to abide the event.

Ingraham, Hatch and Laughlin, JJ., concurred; Patterson, J., concurred in result.

Judgment and order reversed, new trial ordered, costs to appellant to abide event.