Case Name: Charles S. Whiting, Respondent, v. Ralph Derr, Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1907-07-23
Citations: 121 A.D. 239
Docket Number: 
Parties: Charles S. Whiting, Respondent, v. Ralph Derr, Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 121
Pages: 239–242

Head Matter:
Charles S. Whiting, Respondent, v. Ralph Derr, Appellant.
Second Department,
July 23, 1907.
Contract—work to be paid for in installments—pleading.
A complaint which alleges that the defendant agreed to build a boat for the plaintiff, completed and ready for delivery on a certain, day, the plaintiff to pay in four equal installments as the work progressed, but that the plaintiff after paying two installments rescinded the contract because the defendant failed to complete the boat at the time agreed, states a cause of action and is not defective in failing to allege that the plaintiff had paid the subsequent installments.
.Although the third installment Was to be paid when the boat was fit for launching, the allegation that the defendant failed to complete the boat on time does not imply that it was completed to the launching state, and hence it is not necessary to allege the payment of the third installment as a condition precedent to action.
Where a contract has been rescinded an action for money had and received will lie to recover money paid by either of the parties in, furtherance of the contract.
On a breach of such contract by the defendant, he is not entitled to recoup sums expended by him for labor and materials.
Gaynor, J., dissented, with opinion.
Appeal by thé defendant, Ralph Derr, from an interlocutory judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of 'Kings bn the 28th day of November, 1906, upon the decision of the court, rendered after a trial at the Kings County Special Term, overruling the defendant’s demurrer to the complaint.
Clarence P. Moser [David Bennett King with him on the brief], for the appellant.
Conrad Saxe Keyes, for the respondent.

Opinion:
Jenks, J.:
I think that the complaint may be sustained as for money advanced upon a contract upon, a disaffirmance or rescission thereof. (See Weaver v. Bentley, 1 Caines, 47; 2 Pars. Cont. [8th ed.] 794.) In Koerner v. Henn (8 App. Div. 604) the court, per Bradley, J., say: "It is, however, a general rule that an executory agreement, which is entire, may, upon a substantial breach by. one of the parties, be rescinded for that reason by the. .other when it can' be done in loto and the parties put in statu quo. (Weaver v. Bentley, 1 Caines, 47; Meade v. St. Louis M. Life Ins. Co., 51 How. Pr. 1; Giles v. Edwards, 7 Durn. & E. 181; Hunt v. Silk, 5 East, 448.)" In Fulton v. Metropolitan Life Ins. Co. (4 Misc. Rep. 76) .the General Term of the New York.Common Pleas, per Bischoef, J., say : " It is well settled in principle and by authority that where there has been a total failure of consideration; or where a contract has been abandoned, 'or has been rescinded, an action will lie for money had and received to recover back any money paid, by either of the contracting parties to the- other in furtherance of the contract. (2 Whart. Cont. § 742; Raymond v. Bearnard, 12 Johns. 274; Chesapeake & Ohio Canal Co. v. Knapp, 9 Pet. 541, 566; 9 Lawy. ed. 222, 231; Lindsley v. Ferguson, 49 N. Y. 625; 3 Am. & Eng. Ency. of Law, 889.)"
The' allegation that the defendant failed to.complete and to deliver the boat cannot admit the implication that he constructed tlie boat until it was launched or was fit for launching. Hence it was not incumbent upon the plaintiff -to allege compliance with the condition under the contract that a third payment must be made when the boat was launched. The title to the boat or its materials was primarily in the defendant (Andrews v. Durant, 11 N. Y. 35), and was vested in the plaintiff perforce of the special provision of the .contract. But the plaintiff could not in the same breath dis-affirm the contract and assert such title. The defendant was not entitled to receive or to recoup the money, if any, which he had expended for his labor and. materials.- (Havens v. Patterson, 43 N. Y. 218, 223.) The restoration to statu quo " does not mean' that, things should be replaced in eveiy sense as they were, as this is impassible, but that the injured party should restore whatever he has "received that he can restore and surrender any advantages he may have received." • (1 Whart. Cont. § 285.)
I advise affirmance of the interlocutory judgment,, with costs, with leave to the defendant to plead over on payment of costs.
Hirschberg, P. J., and Miller, J., concurred; Gaynor, J., read for reversal.