Case Name: Eagle Iron Works, Appellant, v. Louis Mader, Respondent
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1910-07-29
Citations: 139 A.D. 717
Docket Number: 
Parties: Eagle Iron Works, Appellant, v. Louis Mader, Respondent.
Judges: 
Reporter: Appellate Division Reports
Volume: 139
Pages: 717–718

Head Matter:
Eagle Iron Works, Appellant, v. Louis Mader, Respondent.
Second Department,
July 29, 1910.
Counterclaim — action against contractor for material furnished — sums paid by defendant under contract to which plaintiif was not party.
In an action by a sub-contractor against a principal contractor engaged in the construction of a building for the value of materials furnished, the defendant cannot counterclaim a sum which he paid to an officer of the plaintiff to settle a claim made hy him against the owner of the building for personal injuries received, which payment the defendant made in consideration of an agreement by the owner to release him from a claim for liquidated damages caused by delay in completing the contract, where the plaintiff was neither' privy to the agreement, nor consented thereto. ■ ...
Appeal by the plaintiff, Eagle. Iron Works, from a judgment.of the Municipal Court of the city of Hew-York, borough of Brooklyn, in favor of the defendant, rendered on the 27th day of October, 1909.
John J. Curtin, for the appellant.
Francis A. McCloskey, for the respondent.

Opinion:
Jenks, J.:
The plaintiff was a sub-contractor, the defendant the'contractor,' and this action is brought to recover a balance due for goods, wares and merchandise furnished to the defendant. The claim was for $117.24. Two defenses " counterclaimed," (1) $350, and (2)-$76,10. The learned Municipal Court allowed the' plaintiff's claim, allowed the first "counterclaim," but disallowed the second " counterclaim," so that the defendant recovered a judgment for $232.76. I think that this was error. The defense in question set up that the contract between the defendant and the owner of the premises provided that the work was to -be doné oil November 15, 1907, and that in default thereof the contractor would pay $20 a day for liquidated damages,, un^ss it could be clearly shown to the satisfaction of the architect that such .delay was caused by a combination of the contractor's workmen or -by the act of God, or by a sus-' pension of the .work by written order of the architect; that plaintiff failed in the performance of his contract with the defendant; that such delay was not due to any of the said excepted causes; that by reason of the delay defendant was..obliged to pay and-did pay $350 as and for liquidated damages under the contract (i. e., that with the owner), and that plaintiff's' contract with the defendant ivas to be completed by November 15, 1907.- The defendant, to establish this defense, gave evidence that May, an -officer of the plaintiff, received personal injuries from falling into an excavation in the premises-; that he presented a claim therefor against the. owner thereof.; that the-owner, agreed with the defendant, that he would release the. defendant from the claim against him for liquidated .damages for delay under the contract if the defendant would pay May $350, in satisfaction of May's claim. 'But it does not appear that the plaintiff was party or privy to this arrangement, or consented in any way thereto. As .the plaintiff was not privy to the contract between the .defendant and the owner, he certainly , could not be bound by this adjustment of the liquidated damages, even though he was wholly "responsible for the delay of the defendant. (See Carver v. Hall, 3 App. D. C. 170, and cases cited.)
The judgment is reversed and a new trial' is ordered, costs to abide the event!
Hirschberg, P. J., Woodward, Rich and Carr, JJ., concurred.
Judgment of the- Municipal Court reversed and new trial ordered) costs to abide the event.