Case ID: ad_71/html/0040-01.html
Source: Caselaw Access Project
Author: {"author": "Ingraham, J. :", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Marie A. Walter, Respondent, v. Leonard Hangen, Appellant.
    
      Action to recover dmiagesfor a failure to build a house as required by a contract — measure of damages—competency of areal estate broker to testify as an expert as to the cost of remedying the defects— loss of rent not alleged in the complaint cannot be proved.
    
    Where an owner of land after accepting, as completed, buildings erected thereon for him by a contractor, and remaining in possession thereof for nearly a year, brings an action against the contractor for a breach of the building contract, because of the latter’s failure to comply with certain details of the plans and specifications of the buildings, the measure of damages is the difference between the value of the'buildings as actually constructed and what their value would have been if constructed in accordance with the contract,' and not the cost of tearing down the buildings so far as they did not comply with the contract and rebuilding them as the contract required.
    A real estate broker, who testifies that as a. part of his real estate business he has built for himself and others and has superintended repairs, of buildings, but who is not a builder and is not shown to have had any knowledge of the cost of buildings, is not competent to testify as an expert as to the cost of remedying the defects in the buildings erected by the defendant.
    Where the complaint and a bill of particulars served by the plaintiff contained no allegation of any loss of rents on account of the defendant’s breach of the-Contract, testimony tending to establish a loss of rents from that cause is incompetent.
    ■ Appeal by the defendant, Leonard Hangen, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Hew York on the 22d day of May, 1901, upon the verdict of a jury, and also from an order bearing date the 21st day of May, 1901, and entered in said clerk’s office, denying the defendant’s motion for a new trial made upon the minutes.
    
      William Rumsey, for the appellant.
    
      H. M. Gescheidt, for the respondent.
   Ingraham, J. :

The plaintiff in this action sought to recover the damages sustained by reason of a breach of a contract by which the defendant agreed to rebuild two buildings known as Hos. 20 and 22 Clinton place in the city of Hew York. The amount of damages demanded in the complaint was $10,000 and interest, and the jury found a verdict for the plaintiff for $7,700; and from the judgment entered upon that verdict and from an order denying a motion for new trial the defendant appeals.

By the contract between the parties the defendant was “ to alter, erect and rebuild the buildings upon the premises known as Numbers 20 and 22 Clinton Place in the City of New York, agreeably to certain drawings and specifications made by John H. Brown, architect * * * in a good, workmanlike and substantial manner, and also to find and provide such good, proper and sufficient material of all kinds whatsoever as shall be sufficient for the completing and finishing of all the work on said buildings provided for and mentioned in the said, plans and specifications, all for the above-mentioned sum of twenty thousand eight hundred dollars.’ The complaint alleges that the defendant did not fulfill his part of the agreement or comply with the conditions of the said plan and specifications, and that by and through the negligence, unskillfulness and failure of the defendant to comply with the terms and conditions of the said agreements, plans and specifications, and not erecting the buildings as therein provided, the plaintiff has sustained damages in the sum of $10,000.- A bill of particulars was furnished By the plaintiff in which was specified the instances in which the defendant failed to comply with the plans and specifications. Upon the trial the plaintiff gave evidence which tended to show that the defendant had not complied with the contract. By the contract the plaintiff was to pay the defendant the sum of $20,800 for the work and material by executing, acknowledging and delivering to the defendant a bond secured by a mortgage upon the premises for the sum of $21,000, payable in five years from the 1st of June, 1896, with interest; and it is alleged and not disputed that that bond secured by a mortgage was given by the plaintiff to the defendant and accepted by him.

The most serious question presented on this appeal is as to the measure of damages adopted by the learned trial judge in submitting the case to the jury. It appears that one Harft, a real estate agent, had been the plaintiff’s agent in respect to these buildings, and acted as her agent in negotiating the contract with the defendant. He signed the contract as agent of the plaintiff, and the plaintiff testified that he was her agent; that he notified the defendant of some of the defects in the buildings as they developed; that he went with her from time to time to the buildings; that he took possession of them for her in October, and that he represented the plaintiff in taking possession of the buildings. It also appeared that plaintiff had been in possession of the buildings since October, 1896; had rented these buildings to tenants, and had been in receipt of the rents;

Harft, who appears to have been a real estate broker, was called as a witness for the plaintiff, and testified as to visiting the buildings during their construction, and as to various particulars in which it was claimed that there was a violation of the contract by the defendant. The witness then was asked whether he could tell with rear sonable certainty what it would cost to repair these defects. This - was objected to on the ground that he was not an expert. This-, objection was overruled, and the counsel for the defendant asked that he be allowed to cross-examine the witness as to his competency as an expert, which was refused, the court stating that the defendant’s counsel could cross-examine afterwards, to which counsel for the defendant excepted. "Wé do not think that this ruling can be sustained. The witness was not a builder. He had testified that as a part of his real estate business he had built for himself and others, and had superintended repairs of buildings during the forty years he had been in business, but there is no evidence that he had any knowledge of the cost of building at this time. The witness answered that it could not be done for less than $10,000, and that some of the defects could not be repaired at all. The witness was then asked whether, if the buildings had been finished according to - the terms and conditions of the contract, he could have leased some of these floors or the entire building. This was objected to, but the objection was overruled and the witness answered “ yes.” As there was no claim made in the complaint or bill of particulars for loss of rent, it is difficult to see how this testimony was competent. The witness was. subsequently allowed to testify as to the amount of rents he would have received for the building if completed according to the terms of the contract. The court charged the jury that they could give no damages for delay, but the evidence was not stricken ; out nor were the jury instructed that they could not allow-the plaintiff for the rents that the witness had testified lie could have receivéd ' if the buildings had been completed- as required by the contract. After the plaintiff took possession of the buildings, no repairs were made to the walls and nothing was done in relation to rebuild^ ing them. On October 1, 1896, the plaintiff took possession of the buildings, rented them and has continued in possession since that time. After the plaintiff took possession of the property there was-submitted to the defendant certain specified instances in which he had failed to comply with the contract; and in these particulars the contract was complied with by the defendant. Two witnesses were then called by the plaintiff as experts who had examined the buildings, and testified as to the cost of rebuilding so that the building would comply with the contract. One of these experts testified that the cost would be $9,686.51 for Mo. 20 and $5,106.63 for Mo. 22, aggregating more than half the contract price that the. defendant had received for tearing down the old buildings and building the new. The other witness testified that the full amount necessary to build Mo. 20, according to the plans and specifications, was $7,340.51, aiid to rebuild Mo. 22, $2,731.62. These estimates were based entirely upon an examination of the buildings made by these two witnesses in 1900, nearly five years after the buildings were completed and accepted by the plaintiff. The estimates were not based upon the difference in the value of the buildings as they existed, and the buildings as they would have been if completed according to the contract; but were based upon an estimate of the present cost of tearing down the buildings, so far as they were not completed as required by the contract and in rebuilding in accordance with its provisions and supplying all the other defects which are now shown, to exist five years after the completion and acceptance of the buildings in a way that would make them substantially new buildings.

The contract requires that the defendant “ Lath all ceilings, partitions and exposed or outside walls, and the cellar ceiling with wire lath; plaster three coats, scratch brown and a hard finish.” It appears to be conceded that this provision of the contract was not complied with and that wood lath was used instead of wire lath. The estimate of these witnesses included removing the wooden and substituting the wire lath and replastering from end to end, which would cost the sum of $1,567; for tearing down and rebuilding the defective walls $2,500; and other changes of this character. Upon this evidence the court charged the jury as to the measure of damages as follows : “ As I have said, the plaintiff asked for $10,000 damages, and put a number of witnesses on the stand, who testified in detail as to the difference. As I remember the testimony of Mr. Devoe, he made the loss on Eo. 20, $8,081.91 and onEo. 22, $2,767.29, or a .total of $10,849,20; while Mr. Sorensen put the loss on' Eo. 20 at $7,260.51 and on Eo. 22, $2,244.05, making a total of $9,504.56. You are to examine the evidence with care. If this, contract was not completed, as required by the plans and specifications, and if such, failure so to complete was not caused by changes made by the plaintiff or her agents, then the plaintiff is entitled to recover such sum as you think will compensate her for the loss that she has sustained because1 of the failure of the defendant to do the work as provided by the contract.” There was thus submitted to the jury the testimony of these witnesses, which included this substantial rebuilding of the premises, as the measure of damages, leaving to the jury to give in their discretion the cost of such rebuilding. The counsel for the defendant asked the court to charge.that in the case of a building contract the owner is not entitled to recover the cost-of making extensive changes simply for the purpose of making the building technically conform to the contract, where such changes are not reasonably necessary to make the building substantially sufficient for the purposes for which it was designed, but is only entitled to recover the difference between .the value as constructed and .as it would have been if constructed as provided by the contract. . The court replied, “ I have substantially charged that. I decline to charge otherwise than as • I have.” The counsel for thé defendant excepted. An examination of the charge to the jury fails to show' that this request was substantially charged. The jury were not instructed that the .measure of damages was the difference between the value of the buildings as completed and the value of. the buildings as .called for by the contract; their attention was called to the total amount which these witnesses had testified .it would cost to rebuild these buildings so that they would be as required by the plans, and specifications. Here a builder is not suing to recover the contract price, in which case proof of a substantial compliance with the .contract or an excuse for- not having substantially complied with it is required as a condition precedent to a recovery, but the owner is suing the contractor to recover damages because he had has not complied with his contract in the construction of the buildings. Here the buildings were completed and accepted as completed by the plaintiff, and after such an acceptance, and after having been in the possession of the plaintiff for nearly a year, this action is brought. In such a case, as we understand it, the measure of damages is not what it would cost to tear down the buildings and rebuild them as required by the plans and specifications. What the plaintiff was entitled to is not what it would cost to replace the defective buildings by new buildings, but a money award that will place her in the position that she would have occupied had the contract been complied with. In other words, she is entitled to a judgment for the amount of the damages she has sustained because of the failure of the defendant to give her the buildings that he contracted to give her. This rule of damages is sustained by the authorities. In Morrell v. Irving Fire Insurance Company (33 N. Y. 429) the defendant having insured a building which had been destroyed by fire chose to rebuild. The defendant failed to complete the building, and the court held that the contract of insurance had become a contract to rebuild the building, and the rule of damages was laid down as the difference in value between the building as it existed on the day it was destroyed by fire and the building which the insurance company furnished and delivered to the plaintiff. Kidd v. McCormick (83 N. Y. 391) was an action for damages for the failure of the defendant to complete a house; and in speaking of the measure of damages, Chief Judge Folgeb said: “ Stated in its broadest form, the plaintiff is to have that compensation which will leave him as well off as he would have been had the contract been fully performed. With more particularity he has a right to a house as good as that which the defendants agreed to furnish, and his damages is the difference between the value of the house furnished and the house as it ought, to have been furnished. One kind of testimony by which that difference may be made known is that of experts saying what would have been the value of the one and what is the value of the other. Another kind of testimony is that of experts, what it would cost to complete the unfinished house up to the mark of the contract. Another kind is, when the house has been in fact finished up to that mark what it did in fact cost to finish it. But these ways all lead to the same end; what is the difference in value between the unfinished house and a house had it been finished as agreed upon.” It will be noticed that of three kinds of testimony referred to, the one applicable to the case at bar, where the buildings had been finished and delivered as completed and accepted by the plaintiff as such, is that of the difference between what would have been the value of the buildings according to the contract and what is the value of those actually furnished, and it is the difference in the value of the buildings as agreed to be furnished and the buildings as actually furnished that she was entitled to recover in this action. The learned trial judge in submitting the case to the jury certainly did not indicate to them this rule of damages, but called their attention to the testimony of the two witnesses who testified as to what it would cost to partially tear down these completed buildings and rebuild them as provided for by the contract, a measure of damages, that, so far as we know, has never been applied in any case of this character; and one that imposed upon the defendant a harsh rule of damages. And when the court was requested by defendant to charge that the plaintiff was only entitled to recover the difference in the value of the house furnished and the house as provided for by the contract, the request was refused. In view of the size of this verdict in proportion to the total cost of building the house as provided for by the contract, it would seem that the jury were misled by the failure of the court to clearly state to them the correct rule of damages, and for that reason the judgment must be reversed.

Many other questions were raised by the record, but in view of the conclusion we have arrived .at on this question, they are not necessary to be considered. We only wish to say that we do not approve of all the rulings on questions of evidence.

The judgment and order should, therefore, be reversed and a new trial ordered, with costs to the appellant to abide the event.

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

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