Case Name: Watson E. Roberts, as Receiver of the Property, etc., of George F. Ells, Respondent, v. Wells & Co. (Limited), Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1896-04
Citations: 4 A.D. 395
Docket Number: 
Parties: Watson E. Roberts, as Receiver of the Property, etc., of George F. Ells, Respondent, v. Wells & Co. (Limited), Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 4
Pages: 395–399

Head Matter:
Watson E. Roberts, as Receiver of the Property, etc., of George F. Ells, Respondent, v. Wells & Co. (Limited), Appellant.
Contract — advances to pay "men” does not include the compensation of the contractor— measure of damages in the case of goods pan'tly manufactured, hut never delivered.
In an action brought, to recover damages resulting from the breach of a contract, it appeared that George T. Ells, of whose property the plaintiff was receiver, entered into, a written contract with the defendant to manufacture 600 chairs at a price to be thereafter agreed upon, the defendant promising to advance Ells money to buy the timber, and also “to advance him on account weekly to pay men the amount as per statement of wages presented by Mr, Ells.” ' - Under this arrangement the defendant furnished timber for 600 chairs (of which up to November 11,-1893,, Ells.-had delivered 483). The .defendant having advanced money sufficient to. pay all the nien employed, excluding the services of Ells, refused to advance any more money upon the ground that he had already advanced more money than the chairs .were worth, whereupon Ells, who claimed that the defendant was bound to advance a further sum for Ells’ own wages, ceased work and a receiver of his property was soon thereafter appointed.
Reid, that the contract did not contemplate that any advance payment should be made by the defendant for the services of Ells; that the men who were: to be paid by the advances were only the workmen.
Upon the question of damages it appeared that when Eds stopped work, he had on hand material ready to put up, or nearly so, 150 chairs, which he valued for that purpose at §700 or §800; this material he never delivered to the defendant, which was charged, by the referee with costs and expenses of all work done by Ells, which amounted to §1,335.93, and credited with the amount of wages advanced, §740.96, and allowed only §45 for chairs and material retained.
Held, that if the defendant was to be charged with the whole expense of the work done, Ells should be charged with a fair value to Ells of the material in process of construction never delivered, and upon which much of the work charged to the defendant was done. .
Appeal by the defendant, Wells & Op. (Limited), from, a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the plerk of the county of Broome on the 18th day of June, 1895, upon the report of a referee.
Roberts & O'Brien, for the appellant.
Carver, Deyo & Jenkins, for the respondent.

Opinion:
Parker, P. J.:
George T. Ells, doing business under the name and style of the Ells Manufacturing Company, entered into a written contract with the. defendant, dated April 4, 1893, the terms .of Which are substantially ns follows :
Defendant orders Ells to manufacture and deliver to. it fifty dozen chairs, for ' which it agrees to pay a price to be thereafter agreed upon. It further agrees to advance to Ells money sufficient to buy 'the timber for such chairs, such advances to be credited.it on the purchase price of the chairs. It also agrees " to advance him on account weekly to pay the men, the amount as per statement of wages presented by Mr. Ells." It was further agreed that an exact account of cost of chairs' was to be kept by Ells, and that the price, should be agreed Upon after-the order'was'turned out,, and' also "the: price of future orders. Also it was agreed that the defendant should have the exclusive sale of the Ells Elastic Back Rocker and Chair.
After some delay Ells .entered upon the performance of this contract, Up to Uóvembér 11, 1893, he had manufactured and delivered, to the defendant 483 chairs,, and also had" in process of construction, but not completed, a considerable number , of others. Just how many does not appear. .
The defendant furnished more than sufficient timber to manufacture the 600 chairs, It also, from time to time up to such . date: advanced to Ells, in' response to calls made. by. him, the sum Of :$J40.96, tobe applied upon wages of men employed upon-the Work.
' The defendant then refused to advance any more money, claiming that it had ah'eady.advanced:,more than.the.-value of thq chains received. Ells thereupon ceased work on the chairs. Soon after-wards this plaintiff was appointed a receiver of all his property and effects, and as such receiver brings this action to recover against defendant damages for a breach of contract.
" It appears from the statement rendered by Ells (which is found on page 76 of the appeal book), and it is not disputed by the plaintiff, that the total demands made by Ells for wages up to November eleventh,- amounted to $1,"150.96.- In this amount there was included the sum of $444"as wages to himself, at the rate of $3 per day. The amount, therefore, used for wages other than to himself up. to such date was $706.66.
The defendant had advanced up to such date the sum of $740.96 as also appears from such statement. Therefore, unless defendant was obligated under the contract to advance daily wages to Ells himself, it was not in default at the time it ceased paying. It had, up to that time, performed all that it agreed to do, and no breach of its contract had occurred when Ells stopped liis work under it.
It was Ells' duty, under the contract, to at least continue the work and furnish the chairs, so long as defendant actually advanced the funds which he had agreed to advance.
We are of the opinion that, under the contract, the defendant was not bound to advance money to pay for Ells' services. The phraseology of the contract is quoted above.
In substance it is to advance to Ells weekly, and on his statement, wages to pay the men. The idea that money was to be advanced to Ells for his own services is not to be found in the language used. On the contrary, it is excluded. .It is to pay the men, evidently men employed by Ells, and it is to pay the wages of men so employed.
Ells could hardly be considered as employing himself at wages to be fixed by himseff,;r,Wi',have we any idea that such was the intention of the parties to the contract. Whatever labor Ells put into the construction of those chairs, whether as a "workman at the bench, or as an overseer in the shop, or as a purchaser of materials, would properly be figured in, when the cost of the chairs was ascertained, and it would be an element in fixing the price, but'it was not a part of the expense which the defendant was. obligated to ád/oance dur ing the process of the work, nor is there anything in the conduct of the defendant acting under the contract that indicates a different interpretation of it, although Ells' services were in fact included in the weekly statement rendered. That statement was for a gross amount, and did not on its face carry notice to defendant that anything for Ells' services was being asked for.
• It appears, therefore, that when he stopped the work, Ells was demanding from defendant more than lie was entitled to, and no breach of the contract on defendant's part lias been shown.
' If, however, it be conceded that a breach of contract by defendant has been shown, it seems that the referee has fallen into an error in estimating the damages which Ells sustained.
Ells was in the business of manufacturing this kind of a chair when this order for fifty dozen was given. He entered upon the performance of the work, and up to November eleventh had, as the referee finds, expended $1,335.93 for labor and material therein. At that date he ceased the work, having delivered to defendant 483 chairs, and having on hand a large amount in process of construction. This appears from the statement rendered by him to defendant in November and is found on page 79 of the appeal book. The value of that material as then fixed by him was $692.80. All this property was retained by the plaintiff, who refused to give it up on the defendant's demand.
The referee in making up the damages against defendant charges it with the cost and expenses of all work done by Ells under the contract, amounting to $1,335.93. He gives the defendant credit for the money paid by it on account of wages, .$740.96, and he gives it credit for $45, value of chairs and materials retained by plaintiff, and for the balance of. $549,97 he orders judgment against defendant.
Manifestly if the defendant is to he charged with the whole expense of the work done under the contract, Ells should be charged with the fair value to him of the material in process of construction which he never delivered, and upon which much of the work charged'against defendant was done. .
In any method adopted for ascertaining what Ells has actually lost by defendant's breach of contract, the fair value of the property so retained by him, for the purpose of being finished into chairs, would seem to he an element which should be charged against him. As he expresses it in the statement sent, " there is enough stuff ready to put up (or nearly so) 150 chairs," and he values it for such a purpose at $700 or $800. Surely such property was worth more than $45 to Ells.
He was in the business of making such chairs, and should not be allowed to insist on retaining such property, and yet treat it as only useless wood. Plainly he had not sxistained a loss to the extent of the labor and material he put on that lumber, if at a slight expense he could convert it into 150 chairs. Yet the referee, as appears from his refusal to find defendant's fourth request, has so considered it, and has made up his damages on that theory. We are of the opinion that the measure of damages so arrived at by the referee is an erroneous and unjust one.
These conclusions require that the judgment should be reversed.
All concurred.
Judgment reversed, referee discharged and a new trial ordered, costs to abide the event.