Case ID: ad_74/html/0383-01.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

Rudolph H. Schwarzer, as Administrator, etc., of Joseph H. Waas, Deceased, Appellant, v. Karsch Brewing Company, Respondent, Impleaded with Another.
    
      Measure of damages for the breach of a contract to sell certain articles in stock, and to manufacture certain other articles.
    
    The widow of a man, who, during his lifetime, conducted a saloon upon premises leased by him, procured herself to be appointed administratrix of his estate and proceeded to appropriate the decedent’s property and business to her own benefit. She surrendered the lease held by the decedent and obtained a new one in her own name, and then entered into a contract with a brewing company to obtain certain merchandise and fixtures for use in the saloon, and, as security therefor," assigned her leasehold interest in the premises. The brewing company entered into a contract with the Brunswick-Balke-Oollander Company to furni-h the fixtures at specified prices.
    The Brunswick Company, which had some of the fixtures in stock, and which was obliged to especially manufacture the remaindér, performed the contract . and notified the brewing company of its readiness to deliver the same.
    After the execution of the contract with the Brunswick Company, the widow was removed from her position as administratrix and an administratrix de bonis non was appointed, who brought an action to set aside the surrender of the lease held by the decedent and the lease executed to his widow. The action resulted in an interlocutory judgment declaring that the surrender of the lease held by the decedent was fraudulent and adjudging that the lease to his widow was held in trust for the estate of the decedent, and requiring the widow to deliver possession of the demised premises to the administratrix de bonis non.
    
    The court also adjudged that the defendant brewing company was entitled to a " lien upon the lease made to the decedent’s widow for such damages as it - sustained because of the failure of the widow to accept, receive and pay for the fixtures. No appeal was taken from the interlocutory judgment.
    The referee appointed to ascertain the amount of the damages sustained by the brewing company adjudged that, as to the fixtures which the Brunswick-Balke Company had in stock, there could be no recovery for the reason that such fixtures had a market value and could be sold in the market, and thdt, as to the articles especially manufactured for the saloon a recovery could be had for the reason that they had no market value and, consequently, they could not be sold.
    
      Held, that the administratrix de bonis non could not complain of the rule of. damages adopted by the referee.
    
      Semble, however, that the brewing company was liable to the Brunswick Company for the contract price of both classes of fixtures, and that, consequently, the contract price was the correct measure of the brewing company’s damages.
    Appeal by the plaintiff, Rudolph H. ScliWarzer, as administrator, etc'., of Joseph H. Waas, deceased, from a judgment of the Supreme Court in favor of the defendant, the Karsch Brewing Company, entered in the office of the clerk of the county of New York on the 4th day of February, 1902, upon an 'order of the Supreme Court, made at the New York Special Term, confirming the report of a referee and overruling the exceptions to said referee’s report, and also from an order entered in said clerk’s office on the 4th day of December, 1901, confirming said report.
    
      Gratz Nathan, for the appellant.
    
      John O’Connell, for the respondent.
   Hatch, J.:

It is disclosed by the record that Joseph H. Waas" was during his lifetime the owner of a certain leasehold estate of . premises No. 140 Amsterdam avenue in the borough of Manhattan in the city of New York, and that he conducted the business of a saloon upon said premises, his lessor being Mary J. Burch ell. Waas having died, his widow, Elizabeth C. Waas, the defendant in this action, procured herself tobe appointed administratrix and continued to conduct and carry on the business in her own name, and thereafter procxired the lease to her husband to be canceled by the lessor, and another lease •of the premises executed to herself. She refused to recognize the .rights of- creditors in the estate of her husband, and appropriated the property and business to herself. After the execution of the lease to her, she entered into a contract with the defendant brewing company to procure certain merchandise and fixtures for use in the .saloon, and as security for the payment of the same assigned her leasehold estate in the premises. The defendant brewing company "thereupon entered into a contract with the Brunswick-Balke-Oollen•der Company to furnish the fixtures at specified prices, which it had .agreed ripon, to Mrs. Waas. After making this contract, the last-named company entered upon the performance of the same by providing certain of the fixtures which it had in stock and manufacturing -others which were required to be specially manufactured for the .saloon, and eventually it' entirely fulfilled the contract and notified the defendant brewing company of its ability and willingness to deliver "the same. After the contract had been made by the defendant Waas with the brewing company and by the brewing company with the JBrunswick-Balke-Collender Company, and after the assignment of "the lease as security for compliance with the contract with the brewing company, the plaintiff, upon application to the surrogate, procured the removal of the defendant Waas as administratrix and his appointment as administrator de bonis non. Thereupon the plaintiff "brought this action for the purpose of setting aside the surrender of the lease held by the deceased and of the lease given by the lessor Burchell to the defendant Waas. In such action the brewing company was made defendant. The claim of the plaintiff therein was that the surrender of the lease and the taking of a new one by the defendant Waas and her appropriation of the property of the •deceased, was in fraud of the rights of creditors, and was, therefore, void. A trial of this action resulted in an interlocutory judgment -declaring that the surrender of the lease was fraudulent, and was, therefore, inoperative against creditors and other persons interested in the estate, and the same was reinstated in respect to such rights, •and the lease to the defendant Waas was adjudged to be held and taken in trust for the estate of the deceased, and the defendant Waas was required to deliver to the plaintiff full possession of the -demised premises within five days after the service upon her of a copy of the judgment. The court adjudged as to the defendant brewing company that it was entitled' to a lien upon the lease made to the defendant Waas for such damages, if any, as were sustained by said company for the failure of the defendant Waas to accept, receive and pay for the fixtures for the saloon upon the premises, under the contract which it had made with the Brunswick-Balke Company, but that it was entitled to no other lien. It was further-adjudged that a reference be ordered to ascertain and report the damages, if any, sustained by the defendant brewing company by reason of the failure to fulfill such contract. Pursuant to the provisions of this judgment a reference was ordered and a hearing had, and'thereafter the referee made his report, finding that the contract price of the-fixtures, etc., which the brewing company agreed to furnish-, was of the sum of $1,564, but that there should be deducted from such sum two items amounting to $116, leaving a balance due of $848, which, he reported as the sum which the brewing company was entitled to-have and receive. Upon motion the report-of the referee was confirmed, and final judgment was ordered in favor of .the brewing-company, adjudging that it held á lien for such sum and adjudged and decreed that the same be foreclosed by a' sale' of the leasehold premises. From such judgment this appeal is taken.

There was no appeal taken from the interlocutory judgment. That, seems to have been acquiesced in by all of the parties. There is, therefore, nothing before us upon which we are authorized to review .the correctness of that determination. The. only question involved upon this appeal relates to the rule of damage adopted by the referee and the sufficiency of the proof in support of the sum found to be due. It must be regarded as settled by the interlocutory judgment that the brewing company is entitled to have and receive an award of such damages as it has sustained. By the agreement between it. and the defendant Waas, for all practical purposes, it occupied the-position of a vendor of the property which it contracted to furnish.

The defendant Waas was not a party to the contract which was-made by the brewing company with the Brunswick-Balke-Collender Company. The latter’s contract was a sale of the goods agreed to-be furnished to the brewing company and Mrs. Waas was not known .in that transaction. The relation, therefore, which existed between; the brewing company and Mrs.- Waas was that of vendor and vendee.; The Brunswieb-Balke-Collender Company had the right to stand upon its contract and insist upon the fulfillment thereof by the brewing company. Under such circumstances, it could retain the property agreed to be furnished and sue the brewing company for the purchase price. (Duston v. McAndrew, 44 N. Y. 72; Hayden v. Demets, 53 id. 426; Quick v. Wheeler, 78 id. 300.) The brewing company could not prevent the Brunswick Company from performing its contract and recovering the purchase price of the articles, whether the brewing company gave notice that they would not fulfill the terms of their contract or not. The contract, being valid and enforcible, the brewing company was bound to perform it or to pay such damage as could be legally enforced by reason of a breach. It was, therefore, powerless to prevent completion of the contract by the Brunswick Company. The latter-completed its contract and tendered performance. The brewing company became entitled to enforce against the estate upon which it had a lien by virtue of the interlocutory judgment, such liability for damage as it was under to the Brunswick Company. Such were the rights of the parties. The referee, however, held and determined that as to all of the property which was to be furnished by the Brunswick Company which it was not required to specially manufacture for the saloon, there could be no recovery for the reason that as to it there was a market value for the same; that it could be sold in the market and, therefore, the brewing company as to it sustained no damage. It is evident, however, that under the rule of damage, held by the authorities cited, the brewing company could recover the contract price of these articles as well as of the others, as recovery would be enforced against it. It was entitled to be saved harmless. There is no appeal, however, by the brewing company, and the plaintiff may not be heard to complain of a rule more favorable to him than the brewing company might have insisted Upon.

So far as the specially manufactured articles are concerned, the theory of the referee was that they had no market value and consequently could not be sold, and the brewing company be relieved from liability, and as it was liable therefor, a recovery for the purchase price was authorized. Under the rule of damage announced,the brewing company had the right to insist that these articles be taken and paid for. at the contract price, without regard to. whether they possessed a marketable value or not. The plaintiff is entitled to this property, and it may make such use of it by sale or othérwise as is warranted by law in the administration of the trust. In this respect he steps into the shoes of the brewing company and simply relieves the latter. The brewing company was authorized to insist that this should be done by virtue of the authority contained in the interlocutory judgment. In this view of the case it is entirely immaterial whether a marketable value for this property was established or not. There are .no other questions which require consideration.

It follows that the judgment and order should be affirmed, with costs.

Van Brunt, P. J., Patterson, Ingraham and Laughlin, JJ., concurred.

Judgment and order affirmed, with costs.