Case Name: Ambrose B. Stannard, Respondent, v. Robert H. Reid & Company, Appellant!
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1907-03-22
Citations: 118 A.D. 304
Docket Number: 
Parties: Ambrose B. Stannard, Respondent, v. Robert H. Reid & Company, Appellant!
Judges: 
Reporter: Appellate Division Reports
Volume: 118
Pages: 304–320

Head Matter:
Ambrose B. Stannard, Respondent, v. Robert H. Reid & Company, Appellant!
First Department,
March 22, 1907.
Pleading —"when -amendment at former trial available on new trial — contract — when corporation bound by acts of president — when corporation liable on former contract after discharge of receiver — when plaintiff not entitled to interest on recovery for breach of contract.
When on a former trial the complaint is amended to conform to the proof by a formal amendment set out in the record changing the date of" the execution of a contract, but no formal order is entered and no amended complaint is served, the plaintiff is entitled on another trial to have the benefit of .the former amend- . ment, although the record does not show that it- was allowed to conform the complaint to the proof.
The plaintifE had entered into a contract with the defendant corporation subletting certain work upon a building under construction for the government, for the performance of which contractors were required to give security. The contract was negotiated and signed by the president of the corporation, "who owned half the stock and managed its affairs. Thereafter upon the application of other stockholders receivers of the corporation were appointed, they being empowered to complete existing contracts and to continue the business. The receivers at first agreed to complete the contract with the plaintiff, but afterwards repudiated it as unprofitable, though all other existing contracts of the corporation were carried out. The president of the corporation purchased the stock of other stockholders, and, on his application showing that the company was solvent, the receivers were ordered to turn over the assets of the corporation, which was not dissolved, but the receivers were discharged with like effect as if the proceeding had not been taken.
Held, that the contract was made before the receivers were appointed, and that the effect of their discharge on the application of the sole stockholder without requiring an accounting was to turn over the property of the corporation subject to all liabilities whether incurred by the corporation or by the receivers, who under the circumstances must be treated as agents of the corporation, contrary to the general rule;
That as the contract had been negotiated with the president, who owned -half the capital stock and had charge of the management of the business, the' corporation was bound by his acts;
That as the pi dntiff sent the contract in duplicate to the corporation, which was signed by its president and returned, it was immaterial that the plaintifE did not notify the defendant that he had signed it;
That although the contract required the defendant to give a bond, and the plaintifE had waived that requirement in his negotiations with the receivers, the contract was not thereby invalidated, for a failure to give a bond was a breach of contract by the defendant;
That as the contract as matter of law was made prior to the receivership, and as on the abolition of the receivership the property was restored subject to existing liabilities, an error of the court in refusing to charge that unless the contract was made before the appointment of the receivers there could be no recovery, was not prejudicial to the defendant; '
That as the plaintiff brought suit before reletting the contract to another party, and did not set out that the work had been rclet, or claim damage on the basis of a difference between the contract price and the cost under a new contract, he was not entitled to interest on the sum found due, for the damages were not liquidated.
Ingbaham, J., dissented, with opinion.
Appeal by the defendant, Robert H. Reid & Company, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 30th day of October, 1906, upon the'verdict of a jury, and also from an order entered in said clerk’s office' on the 26tli day of October, 1906, denying the defendant’s motion .for a new trial made upon the ■minutes. . ■ •
This action was brought to recover damages for an alleged-breach of contract to do marble and terrazzo work in the United States Post Office and Court. House “at Elmira, N. Y. The issues . have- been tried three times. On the first trial the jury disagreed ■' and on the second the complaint was dismissed, but upon appeal this court reversed the judgment (114 App. Div. 135) and granted a new trial, which resulted in the verdict in favor of the plaintiff, , which is the basis of the judgment from which this appeal is taken.
The plaintiff alleges that on or about the 20th day of ^November, ■ 1901, defendant entered into a contract with him, a copy of which is annexed to and made a part of the complaint; that defendant abandoned the contract and plaintiff was obliged to employ another contractor to perform the same to his: damage in the-sum of $3,500.
It is stipulated that-on the first trial the .complaint was amended to conform to the proof by a. formal amendment drafted and recited in the record, amending-the 2d paragraph of the complaint'by reciting it as it then stood and adding an allegation that the contract was executed and delivered on the 3d day of January, 1902, but no formal order was ever entered, amending it and no amended complaint was served. The amendment contains no reference to the fact that -it was allowed to conform the complaint: to the proof and z contains no limitation as to the purpose or effect of the amendment.. Appellant contends that as the jury disagreed at that trial the plaintiff could not have the benefit of that amendment at this trial.
The answer admits the incorporation of the defendant, denies the' other allegations of the complaint and alleges two separate defenses and. a counterclaim. It alleges that on or about the 7th day of' February, 1902, when the contract was wholly unexecuted, the court on the application of a stockholder of the defendant in proceedings for its voluntary dissolution, which were, not instituted by the defendant, appointed receivers of the defendant, and that by -operation of-law it became Unable to and did not continue in business until the discharge of the said receivers on February 7, 1903; that plaintiff had' due notice of all the said proceedings;. that the receivers were authorized by, the court to carry out all valid contracts of the corporation and that they refused to carry out said contract on the ground that the same'was not the contract of the corporation ; that the plaintiff took no steps whatever for his own protection or that of the defendant, and that any damage he may have suffered was the result of his carelessness and neglect. The answer also sets foith that the contract, if executed, was executed without any authority or power in the person executing the same; that the same never became operative as a contract as it was never accepted, but rejected by the plaintiff. The .counterclaim asked that the contract, if executed, be canceled, annulled and surrendered to defendant. Plaintiff replied, denying the material allegations of the counterclaim.
The plaintiff had a contract with the United States government to build the post office and court house building at Elmira, N. T. • This alleged sub-contract with the defendant was for the interior marble and terrazzo work. Plaintiff was responsible to the government for the entire contract and executed a bond to the government for the faithful performance of the entire work. He sub-let various parts of the work to sub-contractors, from whom he endeavored to procure bonds acceptable to the company which was his surety.
It appears that prior to November 20, 1901, negotiations were had between plaintiff and representatives of the defendant, princi.pally with Robert H„ Reid, its president, with reference to subletting the marble work; that samples were submitted and bids ' received by plaintiff from defendant which resulted in the preparation by plaintiff of the contract in suit, which bears date November 20, 1901, and provides, among other, things, that at the time of the execution and delivery defendant should cause to be executed and delivered to plaintiff “ a bond with good and sufficient surety or sureties in the sum of Five thousand dollars ($5,000), conditioned upon the full, faithful and complete performance of this agreement.” The contract price was specified as $10,000, and the contract con- . tained a provision to the effect that defendant should make such preparation for performing the work as would enable him to complete the work within sixty days after notice to commence it. On said 20th day of November, 1901, the plaintiff inclosed the contract in duplicate, with bond attached, in a letter which he addressed to the defendant, with the request to “Please execute these papers- and furnish the samples of red marble as quickly as possible.” Plaintiff received no reply to this letter, and on December second he wrote defendant asking'that the agreement and bond be executed and returned to him without delay, and receiving no reply, he again wrote defendant to the same effect on December 26, 1901, saying in the latter.letter: “My Bond Co. on Elmira have called upon me to show up my. sub-bonds which are all in my hands except, yours and * * *. Please have yours in to-morrow,
Friday, if possible. You know that I consider there is no other necessity for asking bond of you.”
Thereafter plaintiff received the contract, with bond attached, executed by Brown & Sutton, as sureties, inclosed in a letter from defendant dated January 3, 1902j which contained, a. request for another copy of the contract on the ground that one of the .duplicates sent by plaintiff had been lost.. *On January 9, 1902, plaintiff wrote the defendant as follows :
“ I am sorry we tried to run in your bond and Bickford, More & Co.’s with so much Brown and Sutton.
“My bond company compliment you by passing Bickford, More & Co.’s bond as O. EL, but throw your bond back at me with request that Brown and Sutton justify before a notary in double the amount of their bond as required by law.
. “ They also call my attention to an error in the typewriting of the bond and the -filling in of the county as ‘ Manhattan ’ instead of ‘ New York,’ and. request me to send them a copy of your agreement.
“ I have, therefore, had prepared two new copies of the agreement, which please sign and have witnessed where marked, and execute a bond with somebody else on it. * * *
“ Please return both copies to us as soon as possible, and oblige, very truly yours.”
On the 10th day of January, 1902, defendant’s secretary and treasurer wrote plaintiff, acknowledging the receipt of the letter and contents, and stating that the company would rectify the matter and return the bond with new names on it. Rot having heard from .defendant on January 20 and January 29, 1902, plaintiff again wrote, asking for the return of the contract and bond .signed ; but received no reply to these letters. „
During the negotiations oné-half of the capital stock of defendant ■ was owned hy Thompson & Starrett, and the other half was owned hy Robert II. Reid, who was the president of the company. Most of plaintiff’s letters to defendant were addressed “ Dear Reid,” and nearly all of defendant’s letters to plaintiff were signed in the name of the defendant by Reid. It appears that dissénsions arose between Thonrpson & Starrett and Reid, each seeking to control the management, which resulted in Reid’s instituting proceedings for the voluntary dissolution of the corporation. On February 3, 1902, Reid presented a petition to the court asking for the appointment of temporary receivers, and setting forth, among other things, that he was president of the company, and that Thompson & Starrett had threatened to ruin the corporation and to acquire it free and clear of his interest, and that they and others had conspired to that end and in furthei’ance of their conspiracy had secretly and without notice to him held an unauthorized and fraudulent meeting of the other .stockholders and elected said Thompson and Starrett and one Burke, who was not a stockholder, and then elected Burke president, and elected another not a stockholder treasurer,'and instigated creditors to bring actions against the company which had been “ in a prosperous condition,” and instigated the landlord to institute summary proceedings to dispossess defendant,'and at their instigation the usurping president' had issued notes of the company to them, and “ that all this has made the company insolvent, and unless a receiver is appointed herein and an injunction issued, the assets of the corporation will be completely wiped out, under the scheme of fraud adopted by the said Thompson & Starrett.”
Annexed to the petition were schedules of the assets and liabilities of the company, also a"list Of uncompleted contracts, eighteen in number, including the Elmira'contract with plaintiff. The court on the 6th day of February, 19.02, appointed said Reid and one Seeger temporary receivers,of the company!, with the usual powers , of receivers, and restrained the creditors and stockholders from suing the defendant. The receivers qualified by filing a bond for $30,000, and all the assets and property of the company were thereafter turned over to them.
On February II, 1902, the receivers presented a petition to the ' court, duly verified, wherein they state “ That in the opinion of your petitioners, the value of all the assets and contracts will be more than enough to pay the creditors in full, provided the same be not sacrificed by the cessation of the plant. * * * That annexed hereto is a schedule of contracts which the said corporation now has for various kinds of work aggregating in amount $131,302.14.”
“That as your-petitioners have, from inquiries made by them, learned and,now allege, the'said -contracts taken together are very valuable and if properly completed should result in a profit to the company of at least twenty thousand dollars, but if not completed the same will be a total loss, and in addition to which the corporation will be liable to the various persons who made such contracts for any deficiency in the carrying out of the contracts.”
Annexed to the petition is a schedule of eighteen uncompleted contracts of the corporation, including that with plaintiff. An order was granted and entered on the 17th day of February, 1902, in accordance with the prayer of the petition, authorizing and empowering the. receivers “ to complete or dispose of all the contracts * * * of the said corporation now incomplete, a schedule of
which contracts is annexed to the petition.” The order also authorized the receivers to perform “ such other work as they may obtain.” The receivers completed all of the eighteen contracts excepting that with plaintiff at a profit, and did work not included in the schedules, making new contracts and doing new jobs of various kinds.
It was conceded on the .record that the receivers as such, after their appointment, confirmed the contract with the plaintiff and agreed to carry it out. Negotiations continued with respect to the bond and finally plaintiff, in view of the fact that the receivers had been authorized to carry out the contract and had given a bond, waived it. No work was actually done, however, by the receivers or defendant in performance of the contract, but the receivers frequently promised to proceed with the work down to about the 1st of May, 1902, and the contract was amended by mutual consent.
Shortly after the appointment of receivers, Starrett, of Thompson & Starrett, testifies, “ Within a month,” and' Beid says, “ the end of June or the beginning of July,” 1902, Beid became the owner of all of the stock of the company, by purchasing and paying for'Thompson & Starrett’s 250 shares.
In the fall of 1902, after Beid became sole owner of the stock, plaintiff repeatedly urged defendant to prepare to do the work, and receiving no reply, wrote defendant — he addressed all communications to defendant after as well as before the receivership — on October 13, 1902, saying:
“ I have, therefore, to state that the said working drawings- and statement of your progress with the work must be in my hands this present week or I must by Monday, October 20th, serve upon yon the five days’ notice provided by my contract with the Dep’t and your agreement with me, and take up the work for your account.”
On October 17, 1902, the receivers wrote the following letter to the plaintiff:
“ In reply to your letter of the 13th, we beg to state that we find that under the changed conditions from the time when the Elmira contract was taken and the present writing that it would not be right forms to proceed with this contract. While at the time the Bobert H. Eeid Sz Co. took this contract it may have been a good one, at the present writing it is not a desirable one. We, as receivers, are not allowed by the Court to run unnecessary risks or continue any work that might not show a profit at the outset; hence our decidirig not to continue this contract. We have, however, obtained prices from several out-of-town concerns, thinking that perhaps we might be able to dispose of this contract advantageously, and at the same time not occasion-you any loss from a time as well as a financial standpoint. The best prices that we were able to obtain were * * *.
“We regret that we were not able to arrive at this decision sooner, but it took some .time to get these different prices “ * There is no reason why, if this contract is given out immediately, there should be any delay. * *. * ”
On October 18, 1902, plaintiff addressed another letter to the company, giving the five days’ notice, and, after the expiration of the five days’ notice, requested the scale drawings and specifications, etc., which -wefe in the possession of the receivers. On the individual petition of Eeid, on notice to the receivers, to their surety and to the Attorney-General, but to no one else, the court on the 7th day of February, 1903, by order discharged the receivers and directed them to turn over the assets in their hands to the corpora tiofi', arid canceled their official bonds', and vacated! the injunctiori against- actions by Creditors. The order discharging the receivers also’ contained a clause as follows:
“ It is ordered that this proceeding be and the' same hereby is discontinued and the’ order to show cause in'ade herein and fi'léd February 7th, 1902, why the said corporation should not be dissolved, SE and the same is dIsgharqed with like effect as if Said proceedings had not been taken.”
The petition fbr tb¡6- discharge of the receivers recited’ the facts concerning their appointment, and averred, .among other things; that " The main ground fóf the commencement- of this s'pedial proceeding was the. inability of the two factions controlling the said corporation to agree* and that s'tich inability and disagreement jeopardized, the assets of the said corporation; ahd'for the purpose of meeting the demands, of creditors, rendered the property upon a- forced sale insufficient to riieet the demands of such creditors: * * *
" Thai thereafter the hearing before the’ referee on the order to' show caiise herein' proceeded, and during such proceeding and in or about the month of June, 1902, your petitioner and the said Tlromp-. son & Stárrétt, the owners together of all the stock Of the corporation;. compromised their differences with respect to the management of the corporation, and the said Thompson- & S turret § sold out all their holdings’ in the stock of the said corporation to your petitioner, who thereupon' succeeded to their interests and is now in eofitrol Of the Whole of thé capital stock of the said corporation.
Tour petitioner further shows that all of the unsatisfied engagements at the time of -the filing of the petition herein; none now remain undisposed of, the receivers having completed or disposed of all the contracts Or unsatisfied engagements upon which • the said corporation was liable,, and that during the period of íhe said receivership ytiur petitioner, personally,, has acquired by payment' and 'assignment; all of the claims which Creditors hold, against said corporation at the time of the making Of-the order to' show Cátise herein, éxbept (claims secured by his personal'notes, net yet due).
“* • * * That the assets of the said corporation at the present timé) exclüsi.vé of the lease* which is a valid asset Of the. Said corporation' amount id more than $'§'0,000 in value aiid consist Of. a large, amount of - property, accounts and contracts; while the total indebtedness not acquired by your petitioner and for which claims are made, does -not exceed the sum of $33,000, and that the said corporation is absolutely solvent and your petitioner is assured that the said corporation will meet all claims as they become due hereafter, the balance of the claims amounting to upwards of $20,000 being held by your petitioner.
“Your petitioner further shows that the causes which led to the institution of these proceedings, are now .eliminated, and that therefore there is no reason for the continuation of these proceedings * * *.”
Eeid also testified that “ all the former creditors of the corporation w'ere paid during the receivership period, not by the receivers, if that is what you mean. Their claims were not compromised, they were paid in full 100 cents on the dollar by me personally out of my personal funds. They were paid by me and the corporation afterwards paid me.”
Upon the discharge of the receivers, Eeid resumed the presidency of the company and held the office until March, 1905, but severed his relations with the company and ceased to be a stockholder early in July, 1906.
After the discharge of the receivers, and on February 19, 1903, the plaintiff entered into an agreement with the J. Franklin Whitman Company, of Philadelphia, the lowest bidder, to do the work called for by the Elmira contract with defendant or the receivers, for the sum of. $13,125, or $3,125 in excess of the price at which defendant or the receivers agreed to do the work. When plaintiff contracted with the Whitman" Company he did not know that tlie receivers had been discharged. The Whitman Company subsequently performed the contract and was paid in full by plaintiff, who brings this action to recover $3,125 and interest from October 17, 1903, the difference between the price paid the Whitman Company and the price at which the defendant or the receivers agreed to perform the work, on the ground of breach of contract.
At the close of the case both parties moved’ for the direction of a verdict. The court announced its readiness to direct a verdict, whereupon the defendant withdrew its motion and asked that the case be submitted to the jury. The jury rendered a verdict for the full ámóunt of damages claimed by plaintiff, with interest from the date' of the last payment to the Whitman Company. .The defendant requested the court to charge, among other things, that unless the contract was ..made on or about the '20th day of November, 1901, the defendant was entitled to a verdict, and also that “if the jury find that the alleged contract was not entered into before the appointment of tlie receivers, then their verdict, must be for the defendant,” which requests were declined .and counsel for the defendant duly excepted. The other material facts appear in the opinion.
Robert Goeller [ Jacob H. Shaffer with him on the brief], for the appellant. ,
Lyman A. Spalding [George S. Scofield, Jr., with him on the brief], for the respondent.

Opinion:
Laughlin, J.:
I am Of the opinion that the plaintiff was entitled to the benefit of -the formal amendment to the complaint made on the first trial. It only related to the date that the contract became of force. The contract bore date the day it was originally alleged to have been made. The amendment changed that date from November 20, 1901, to January 3, 1902, the day the. defendant mailed the contract signed by it to the plaintiff. The court would doubtless have directed the service of the pleading as amended had that been requested. . .
The court by declining to instruct the jury that there could be no recovery unless the contract was made prior to the appointment of the receivers, in effect permitted a recovery even though the contract was made by the receivers. The general rule is that receivers are officers of the court, deriving their authority under the law .from the court, and that they are riot the agents of the party of whom they are appointed receivers in the sense, that they have authority to bind the party by any act' or omission on. their part (Ahern v. Steele, 115 N. Y. 203, 232; Lottimer v. Lord, 4 E. D. Smith, 183,191; Railroad Co. v. Soutter, 2 Wall. 510, 519; Chicago Union Bank v. Kansas City Bank, 136 U. S. 223, 236; Texas & St. L. Ry. Co. v. Rust, 17 Fed. Rep. 275, 282; Dow v. Memphis & L. R. R. Co., 20 id, 260,269; General Electric Co. v. Whitney, 74 id. 664, 667; Smith Receivers, 35; Alderson Receivers, § 5, 301); and with respect to contracts made by them, the rule is that they only in their official capacity and the property in their hands are liable, and that the liability should be enforced in the receiver- • ship proceedings. (New York & W. U. Tel. Co. v. Jewett, 115 N. Y. 166, 168; Heath v. Missouri, K. & T. R. R. Co., 83 Mo. 617.) It is doubtful, therefore, whether the corporation would be liable if the contract was made by the receivers, unless under the order discharging the receivers, but the circumstances relating to this receivership are peculiar, and in the view I take of this case it is unnecessary to decide that question. If the contract had been made by the receivers there would also be difficulty in view of the form of the pleading, and it may well be even if the corporation would be liable, that it should have been alleged that the receivers made the Contract and that the circumstances relating to the receivership and to' the discharge of the receivers should have been alleged. I am of opinion that as matter of law the contract was made by the defendant before the receivers were appointed, and that the effect of the order discharging the receivers without requiring an accoiyitingby them, made upon the application of the sole stockholder of the company, was to turn the property over to the corporation subject to all the liabilities, whether incurred by the corporation or by the receivers, whom the court, by the order discharging the receivers, apparently treated as the agents of the corporation, and that the corporation by'accepting the property from the receivers and continuing the business acquiesced in this view and became bound accordingly. The material facts in the negotiations with respect to the contract are contained in the statement of facts and need not be restated. Reid, who negotiated and signed the contract' for the defendant, owned half the capital stock, was president of the company and in charge of the "management of its business, and as to third parties dealing with the corporation was presumably authorized to execute the contract. When the defendant received the draft of the contract in duplicate from the plaintiff it understood that the'plaintiff intendéd to award the contract to it, and on signing the contract it was entered upon the books of the defendant as a contract. It appears by the evidence that upon the receipt of the. contract thus signed by the defendant the plaintiff signed it. It is' immaterial that he did not-notify the defendant that he had signed it*, beeau-se-it was- assumed- by both- parties that the contract had been executed-, and the only question left open was- the approval- of the bond which the defendant-by signing the contract obligated itself to give.' .Her does ihappear that the parties we're unable' to agree with respect to the bond. The plaintiff did not reject the bond executed- and tendered by the defendant, He retained it and produced it upon the trial. At. the. suggestion of his surety on the'general eon-tract with the government lie sought to obtain another bond and the defendant manifested a willingness to furnish it. After the-appointment óf the receivers* in view of their having furnished a bond as receivers and having been authorized by the court to execute this contract,.plaintiff waived any further bond. For aught that appears tlie'bond furnished by the defendant complied with its contract to furnish a bond with good and sufficient sureties; but even though it did n.ot, the contract had been madéandit was expressly therein provided' that the defendant -should furnish such a bond. If it did not do só it would have been- guilty of a breach of the contract which-:Wouldhavu justified tl-ie plain-tiff in .reletting the -work and holding it responsible for his damages ; and on the other hand, if the plaintiff rejected a bond that complied "with the con tract, he would have, been guilty of a breach of the. contract and the defendant would have been entitled to recover the profits it would-have made on the contract. It maybe that an-erroneous view indulged-, in by both-parties that their negotiations constitute an agreement, does not establish a- contract between them (Nundy v. Matthews, 34, Hun, 74, 79), hu-t the understanding on the part of both parties'that a binding contract-had been made, and steps taken by them- thereunder wit-ha view to the performance of the contract, are to be considered material evidence of great weight on the question. The validity of the contract was recognized in" the petition for .the' appointment of the-receivers* hut Eeid, at that time* was acting in hi-s indi vidual interest as a stockholder and not as president of the corporation and bis declaration* not being in- the. line of duty, doubtless was no"t binding upon the company; and yet this receivership appears to have been merely a receivership inform brought about* not as represented to the court fbr the dissolution- of the corporation* hut to enable Eeid to obtain control of the corporation* Us is' shown -by the facts that Reid became the active receiver and soon after his appointment negotiated the purchase of the other one-half of the capital stock .of the company not owned by him, and stopped the proceedings before the referee, and, finally, by Ills petition for a discharge of the receivers without an accounting, in effect showed that the company had not been insolvent, and its solvency at that time is clearly established by the evidence. The proceedings before the referee with reference to proof of claims against the corporation, if begun, were not completed. Neither the referee nor the court passed upon claims against the company, nor did the court pass upon claims arising during the receivership nor require any accounting by the receivers. These matters were doubtless dispensed with owing to the fact that Reid had become the sole stockholder of the company and desired to have the receivership'terminated, and the property restored to the company, to enable him to continue the business. In these circumstances, the proper construction of the provision of the order discontinuing the proceeding and discharging the receivers "with like effect as if said proceedings had not been taken," is that the property was restored to the corporation subject to all of the liabilities of the corporation — and probably to all of the acts and proceedings of the receivers — and by accepting back the property and resuming the business, the corporation assumed the liabilities. If, therefore, it can be affirmed as matter of law that the contract was made prior to the receivership and that the effect of the order discontinuing the proceedings and discharging the receivers was to restore the property to the company subject to existing liabilities, it would seem that the error of the court in declining to' charge that unless the contract was made before the appointment of the receivers there could be no recovery, was not prejudicial to the defendant.
This court on the former appeal (114 App. Div. 135) expressed the view that whether the company would be liable on the contract if made by it prior to the appointment 'of the receivers would depend upon whether the receivership was necessitated by the insolvency of the company, in which event the view was expressed that it would not be liable, but that the company would be liable if the receivership was brought about by it with a view to avoiding its obligations. On the last trial the question as to whether the com pany was insolvent was submitted to'the jury, as a question of fact, under instructions as to the burden of proof in accordance with the decisions' of. this court on the former appeal. The verdict of the jury shows that they found, that the company was not insolvent and their determination is fairly sustained by the evidence. ' '
The court instructed the jury; as matter -of law; that if -plaintiff was entitled to recover, he was entitled to recover interest from , the 17th day of October, 1903, the date of the last payment made ' by him to Whitman & Oo., to whom he relet the work on defendant's failure to perform the contract. Counsel for the defendant duly excepted to this instruction; The evidence shows - that plaintiff relet the work shortly prior to- the commencement of the action, but it does not appear that the defendant was aware of the fact or had knowledge of the contract price. Ñor did the plaintiff in his complaint allege the fact that the work had. been relet or claim damages on the basis of the difference between the contract price for which defendant agreed to perform the work and the cost thereof which he agreed to,pay under the new contract. He alleged generally that hev sustained damages by defendant's breach of the contract in the sum of $3,500, and demands judgment for that - amount, together with interest thereon. Upon the' trial he proved, without objection, that the additional cost of the work, instead of being $3,500, was $3,125, and this was not controverted. Under the instructions of the court the jury added to that .amount the sum of $565.62 as interest. I am of opinion that this was error. The damages were not liquidated. It is true that theré was' a market price for the various items of material, but it" cannot be said that there was a market price for the entire contract- workj which involved the furnishing of material and the performance of labor. The plaintiff did not know even approxiniately what it would cost him to have the work done. He was obliged to receive bids, which differed in amount, and he selected, the lowest, and did not even then assume-to fix his'damages on that basis or notify the defendant. Ñor did he recover the amount of damages' which he alleged in the complaint.-
The other points presented by the- appellant have been examined, -. but do not require special consideration in the opinion. - - .
It follows, therefore, that the judgment should be modified- by deducting therefrom the sum of $565.62, together with interest thereon from the rendition of the verdict to the time of entry f of judgment, and as so modified affirmed, without costs.
Patterson, P. J., Houghton and Lambert, JJ., concurred; Ingraham, J., dissented.