Case Name: William J. Logan and Frank J. Logan, Respondents, v. Consolidated Gas Company of New York, Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1905-08
Citations: 107 A.D. 384
Docket Number: 
Parties: William J. Logan and Frank J. Logan, Respondents, v. Consolidated Gas Company of New York, Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 107
Pages: 384–392

Head Matter:
William J. Logan and Frank J. Logan, Respondents, v. Consolidated Gas Company of New York, Appellant.
Contract to construct a gas holder — explosion of the same from unexplained came, . while being tested,—when the contractor cannot recover the contract price therefor —provisions as to the test; held to suspend the gas company’s liability-to pay, not simply the time of payment —the delivery to the gas company of bills of sale of the materials furnished, held not to constitute an acceptance of the work—-what is not . a substantial performance—performance depending upon the continued, existence of a person or thing.
A gas company entered into a contract with a firm, whereby the latter undertook to well and sufficiently erect and finish complete and in a good, workmanlike and substantial' manner, under the direction of the Chief Engineer of the Owner and to the satisfaction .of said Chief Engineer, to be evidenced by writ ing or certificate under his hand, and in accordance with the drawings and specifications signed by said parties and hereto annexed, a quadruple section gas holder with steel tank and guide frame and other appurtenances,” and to "find and provide such good, proper and sufficient materials and labor of all kinds whatsoever, as well as sufficient apparatus, tools and machinery, for the completion of all the various parts of such work mentioned in the drawings and specifications * * * within six months after the time when the foundation to be prepared by the Owner for the reception of the said tank and GasHolder is sufficiently advanced to allow the Contractor to commence work.” The contract provided that seventy-five per cent of the contract price should be paid upon the completion of the work or in installments during the progress of the work, and that the remaining twenty-five per cent should be paid when the gas holder and its appurtenances had been in satisfactory working order for sixty days.
The contract also provided that “ the Contractor shall also bear and repair all loss or damage to the structure, which may have been caused by accident or otherwise, and on which payments have been made by the Owner,” and that “no certificate given or payment made under this contract shall be conclusive evi-* dence of the performance of this contract, either wholly or in part, against any claim of the Owner to the contrary in any suits or proceedings whatever. Nor shall any certificate or payment in any way release the Contractor from the complete fulfillment of any portion of his work in the manner prescribed by the drawings, specifications and contracts.”
The specifications made a part of the contract provided: “ On completion of the tank, satisfactory test having been made, the Company will do all necessary grading. * * * - The tank will not be accepted until it has been proven water tight after being filled with water to its full height and has so remained for thirty days. * * * The holder shall be properly tested, and, a trial made by raising each section to its full height by air pressure; the whole to be delivered to the Consolidated Gas Company in complete working order, perfectly gas tight. * * * The Contractor * * * shall repair and make good any damage to the property of the Company * * * which may occur during the prosecution of the same, and deliver to the Consolidated Gas Company of the City of New York a gas holder, guide fraiiie, and tank complete in all details in accordance with the spirit and intent of these specifications and the drawings hereunto annexed.”
During the progress of the work payments were made to the contractors, and bills of sale of the materials used therein were given by the contractors to the gas company. December 3, 1898, the work had reached such a stage of com: pletion that there remained to be performed by the contractors only certain minor details arid the remedying of any defects that might be discovered during the tests required by the contract. On said day, pursuant to a notice from the contractors to the effect that the tank was ready to be filled with water, the gas company began pumping water into the tank, which process continued until the tank was filled on December 18, 1898. During the process of filling the tank the contractors’ employees were working- about the tank, and the gas company was engaged in performing the work necessary to connect the tank and holder with its works. On the afternoon of December 18, 1808, and before, so far as appeared, the gas company had connected the tank and" holder with its works, or had taken possession and control of the gas tank and holder, the tank collapsed owing to causes not clearly explained.
The plans and specifications for the tank were conceded to be amply sufficient to render it safe. *
Held, that as the contractors had contracted not merely to perform work and furnish materials to the gas'company, but to deliver tó the gas company, a gas tank and holder in complete working order, which fact was to be established by certain tests specified in the contract, and as the tank had collapsed before any of the contract tests had been completed or waived by the gas company, and before the gas company had accepted the tank, the contractors had failed to perform their contract and could not recover the balance of the contract price from the gas company on the theory that they had substantially performed the contract, particularly as the contractors expressly undertook, by the contract, “ to bear and repair all loss or damage to the structure * * * caused by accident; ”
That the argument that the provisions of the contract relating to tests, delivery and acceptance operated simply to suspend the time of payment, but not the gas company's liability in case compliance with such provisions of the contract was rendered impossible," was untenable;
That the fact that bills of sale were delivered to the gas company, as the work progressed, did not amount to a modification of the contract or an acceptance of the work done, in the absence of proof of any act evincing an intention to accept the work or to waive or modify any of the provisions of the contract; That the contractors could not invoke the rule of substantial performance, because there had been a total failure of performance:
That the rule that where the performance of a contract depends upon the continued existence of a person or thing which is assumed as the basis of the agreement, the death of the person, or the destruction of the thing, terminates the obligation, has no application to a case where the thing destroyed is the thing which one of the parties has expressly contracted to produce and deliver.
Appeal by the defendant, the Oonsolidated Gas Company of New York, from a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of tiie county of Kings on the 12th day of June, 1902, upon the verdict of a jury, and also from an order entered in said clerk’s office on the 10th day of1 June, 1902, denying the defendant’s motion for a new trial made upon the minutes.
' David McClure [Thomas Thaeher and Henry L. 8eheuerman with him on the brief], for the appellant. . .
Augustus Van Wyck, for the respondents.

Opinion:
Miller, J.:
On the 15th day of March, 1898, the plaintiffs as copartners and the defendant entered into an agreement, in writing, by which the plaintiffs, as contractors, agreed to " well and sufficiently' erect and finish complete and in a good, workmanlike and substantial manner, under the direction of the Chief Engineer of the Owner and to the satisfaction of said Chief Engineer, to be evidenced by writing or certificate under his hand, and in accordance with the drawings and specifications signed by said parties and hereto annexed, a quadruple section gas holder with steel tank and guide frame and other appurtenances," and to " find and provide such good, proper and sufficient materials and labor of all kinds whatsoever, as well as sufficient apparatus, tools and machinery, for the completion of all the various parts of such Work mentioned in the drawings and specifications within six months after the time when the foundation to be prepared by the Owner for the reception of the said tank and Gas-Holder is sufficiently advanced to allow the Contractor to commence, work." The agreed contract price was $167,500, seventy-five per cent of which was to be paid upon the completion of the work and its acceptance by the chief engineer of the owner, or in installments of not less than $15,000 as the material was delivered and erected in position, such installments not to exceed seventy-five per cent of the cost of the work, to be estimated by the chief engineer of the owner, and the remaining twenty-five -per cent was to be paid when the holder and its appurtenances had been in satisfactory working order for sixty days. The contract also provided that the usual certificate of the • engineer of the owner should be obtained before any payments should become due, and that "the Contractor shall also bear and repair all loss or damage to the structure, which may have been caused by accident or otherwise, and on which payments have been made by the Owner," and that "no certificate given or payment made under this contract shall be conclusive evidence of the performance of this contract, either wholly or in part, against any claim of the Owner to the contrary in any suits or proceedings whatever. Nor shall any certificate or payment in any way release the Contractor from the complete fulfillment of any portion of his work in the manner prescribed by the drawings, specifications and contracts."
The specifications which were attached to and made a part of the contract contained the following provisions: " On completion of the 'tank, satisfactory test having been made, the Company will do all necessary grading. * " The tank will not be accepted until it has been proven water tight after' being filled with water to its full height and has so remained for thirty days. The holder shall be properly tested, and a trial made by raising each section to its full height by air: pressure; the whole to be delivered to the Consolidated Gas Company in complete working order, perfectly gas tight. The Contractor shall repair "and make good any damage to the property of the Company which may occur during the prosecution of the same, and deliver to the Consolidated Gas Company of the City of New York a gas holder, guide frame, and tank complete in- all. details in accoi'dance with the spirit and intent of these specifications and the drawings hereunto annexed." .
Thereafter the plaintiffs entered upon the performance of the contract. As the work progressed payments were made upon certificates of the engineer, and bills of sale of the "materials used were given by the plaintiffs to the defendant, and on the 3d day of December, 18.98, the work had reached such a stage of completion that pursuant to an arrangement previously made, the plaintiffs notified an employee of the defendant that the tank was ready to be filled with water, whereupon the defendant began pumping water into the tank from the river and continued until the morning of the thirteenth of December, when the process of filling the tank was completed. -The only work called for by the contract that remained to be done on said third day of December consisted of certain tarring in the pit and painting of the holder, the remedying of any defects that might be discovered during the test, and the "adjustment of such parts of the apparatus as its operation should demonstrate needed further adjusting. Between the said third and thirteenth of December several of the plaintiffs' employees were at work finishing the.work, caulking whatever small "sweats" appeared bn the tank, and taking out, shortening and replacing braces between the posts and girders of the guide frame which was required by the defendant's engineer. ' The plaintiffs' foreman and construction engineer were upon the work daily up to and includ ing said thirteenth, and when the men quit work for the day at five o'clock on said day, the plaintiffs' watchmen were left as usual to guard the entrances to the inclosure within which said structure was being erected. For several days prior to said thirteenth the defendant had men employed laying pipe and doing what was necessary to connect the tank and holder with its works when ready for operation, but it does not appear that such connections had been completed. Shortly after five o'clock on the afternoon of said thirteenth of December the entire structure was reduced to a scrap heap, either because of a collapse caused by the pressure of the 1,000,000 cubic feet of water stored in the tank, or because of an explosion produced by some cause not clearly explained. It is not claimed that the plans and specifications, for which, of course, the defendant was responsible, were inadequate, but, on the contrary, it appears to have been conceded that they were sufficient to have produced a structure able to withstand any pressure which its operation would produce and afford a factor of safety of three. After the destruction of the structure the defendant formally demanded of the plaintiffs that they furnish the tank and holder contracted for, while the plaintiffs, insisting that the contract had been performed, demanded of the engineer a certificate to that effect, which was refused, whereupon this action was brought by the plaintiffs alleging a substantial performance to recover the balance due upon the contract, and from the judgment in their favor the defendant appeals.
Upon the trial the respective parties sought to account for the destruction of the tank and holder upon two different theories, and each introduced evidence tending to support the theory advanced, to wit, on the part of the plaintiffs that the collapse resulted from an explosion caused by an electric spark igniting gas collected from the foul water pumped into the tank by the defendant from the river, and on the part of the defendant that the collapse was due to the weakness of the structure itself, produced by the plaintiffs' failure to comply with the plans and specifications which required all punched rivet holes to be reamed. The trial court submitted two questions to the jury, first, whether the plaintiffs had performed their contract according to the plans and specifications, and, second, whether the defendant had taken possession on December third, and on December thirteenth had possession and control of the structure, and was then applying it to the use for which it was intended as a gas holder and not merely submitting it to a test, and charged that if the jury found in the plaintiffs' favor on both of said propositions they were entitled to a verdict; otherwise, that the defendant was entitled to a verdict on its counterclaim.
Testing the verdict by this charge it is manifest that it cannot stand, because there is no evidence whatever that the defendant . had either possession or control of the structure for the purpose of applying it to the use for which it was intended as a gas holder, or for any purpose whatever except to make the test prescribed by the contract. It is not claimed that it had been put to any use whatever. The court distinctly charged the jury that' there was no evidence that the defendant had introduced any gas into the holder from its exhauster house, and the mere fact that the defendant was getting ready to use it, in case it met the. test and worked satisfactorily, is no evidence whatever that it then had it in its possession and control for the purpose of applying it to tlle use for. which it was intended. The contract is entirely silent respecting who should make the test, but giving it the practical construction put upon it by the acts of the parties themselves, it would appear that the defendant was to make the test, the plaintiffs meanwhile to remedy any defects discovered, and to make any readjustments found necessary."
It is clear that the plaintiffs contracted not merely to perform work and furnish materials to the defendant, but to produce'and deliver to the defendant a tank and holder in complete working order perfectly gas tight. The thirty-day water test of the tank had just begun, but it does not appear that any test of the holder had been made, that each section had been raised to its full height by air.pressure, that it was in Complete working order, or was perfectly gas tight, and as the parties contemplated all of these tests before delivery, the defendant cannot be held to have waived them in the absence of proof that it did something more than to make preparations to make the tests prescribed by the contract.
The defendant excepted to the submission of the question whether it had control, possession and custody of the structure and • was. applying it to the uses for which it was intended, and to. the refusal of the court to charge that " there is no sufficient evidence to justify a finding by the jury that the defendant did intend to' accept the structure as a completed structure," and that " the proof does not justify a finding that the plaintiffs delivered the tank, holder and guide frame to the defendant at any time prior to the accident," and these exceptions require a reversal of the judgment.
The respondents earnestly insist that the evidence clearly establishes as the cause of the destruction of the tank and holder an explosion produced by the act of the defendant in filling the tank with foul water, but this contention will not avail in the face of the distinct charge of the court that there was no evidence of any neglect of the defendant causing an explosive to exist inside the tank, or that in fact the holder had become filled with marsh gas, or that the defendant had introduced any gas into the holder. In the condition of the record before us it seems clear that the rule applicable to the case is as. stated in Wheeler v. Conn. Mut. Life Ins. Co. (82 N. Y. 543) ; Tompkins v. Dudley (25 id. 272); Harmony v. Bingham (12 id. 99), and Dermott v. Jones (2 Wall. [U. S.] 1), that " when a person by express contract engages absolutely to do an act not impossible or unlawful at the time, neither inevitable accident nor other unforeseen contingency not within his control will excuse him, for the reason that he might have provided against them by his contract." In the. contract before us the plaintiffs not only failed to guard against the contingency, but expressly contracted to y bear and repair all loss or damage to the structure caused by accident," and we must assume for the purpose of this decision that the plaintiffs' failure to perform was due to a casualty not produced by the act or fault of either party. The argument that the provisions- of the contract relating to tests and delivery and acceptance operated to suspend the time of payment, but not the defendant's liability, and that these conditions having been rendered impossible, plaintiffs may nevertheless recover, would have more force if the contract was merely to perform certain work,and furnish certain materials. The plaintiffs contracted to deliver a completed structure and can only recover by showing performance, acceptance or waiver by the defendant, or that complete performance was prevented by some act or fault of the defendant. It is immaterial where the title to the property was during the performance of the contract, and the' fact that bills of sale were delivered as the wofk progressed does not alter the situation or amount to a modification of the contract or an acceptance of the work done in the absence of proof 'of any act evincing an intention to accept the work or waive or modify any of tile provisions of the contract. As the work progressed the materials attached to the land became the property of the defendant, and, 'if the structure had not been destroyed, for a failure to -substantially perform the contract the defendant could have retained it without making' compensation. (Smith v. Brady, 17 N. Y. 173.) This rule of substantial performance cannot be invoked in this case simply because there has been a total .failure to perform. . Concededly, the plaintiffs had not done all of the work called for by the contract, and though the work undone was relatively trivial, had the plaintiffs abandoned the work at five o'clock on said thirteenth day of December, and intentionally refused to complete the contract, without being prevented from completing by any act of the defendant, they Could not recover on the contract on the theory of substantial performance, and the destruction of the structure not produced by the act or fault of the defendant does'not excuse performance, because it was one of the hazards assumed by the plaintiffs until the contract was performed.
The rule that " where the performance of a contract depends upon the continued existence of a person or thing which is assumed as the basis of the agreement, the death of the person, or the destruction of the thing, terminates the obligation," relied'upon by the respondents, has no application to a case where the thing destroyed is the thing which one of the.parties has expressly contracted to produce and deliver. If upon a new trial the plaintiffs can show that impossibility of performance was caused by the act or fault of the defendant, a different situation will be presented. (Vandegrift v. Cowles Engineering Co., 161 N. Y. 435; Dolan v. Rodgers, 149 id. 489.)
The judgment and order appealed from should be reversed and a new trial granted, costs to abide the event.
Hirschberg, P. J., Bartlett, Jenks and Rich, JJ., concurred.
Judgment and order reversed and new trial granted, costs to abide the'event.