Court Opinion

ID: 5224117
Source: CourtListenerOpinion
Date Created: 2022-01-06 16:40:49.979532+00
Date Added: 2024-06-11T08:27:33.638641
License: Public Domain

McLaughlin, J. (dissenting):
On September 24, 1907, the plaintiff entered into a contract with the Balanced Cable Crane Company, by which the latter agreed, for the consideration of $31,629.94, to sell, deliver and erect for it six excavating cranes. Twenty-two thousand seven hundred and sixty-five dollars and eighty-eight cents of the consideration was paid at or prior to the timé the contract was executed and the balance agreed to be paid in six equal installments, one when each crane was “erected in place and in proper running order and condition and ready for operation.” By the contract the first crane was to he ready for operation on or before the 8th of October, 1907, when it was to he accepted and paid for and the second one week later, and so on until the six had been delivered. Simultaneously with thé execution of the contract the Balanced Cable Crane Company, as principal, and the AEtna Indemnity Company (now in the hands of a receiver), as surety, gave to the plaintiff a bond conditioned for the payment of $20,000, but upon the condition that the same should be void if the Balanced Cable Crane Company faithfully performed its contract. The bond provided: “This bond is executed by the Surety upon the following express conditions, which shall he conditions precedent to the right of the Obligee to recover hereunder. The said Surety shall be notified in writing of any act on the part of said Principal or its agents or employees which may involve a loss for which the said Surety is responsible hereunder, immediately after the occurrence of such act shall have come to the knowledge of said Obligee or to any representative duly authorized by him to oversee the performance of said contract; and a registered letter mailed to the President of said Surety at its office in New York City, N. Y., shall he the notice required within the meaning of this bond.” It also provided that if the principal abandoned the contract or for ■ good reason was compelled by *80the plaintiff to discontinue its performance, then the surety might, at its election, complete the contract and in that case it should be entitled to receive such payments as would otherwise be owing to the principal.
This action is brought upon the bond, the plaintiff alleging it has sustained damage to the extent of $20,000 by reason of the failure of the Balanced Cable Crane Company to perform its contract, for which sum judgment is demanded. The answer .put in issue the material allegations upon which a recovery is predicated except the making of the contract and the issuance of the bond, and alleged affirmatively that the plaintiff consented to the modifications of the contract, without notice to the indemnity company, and without its knowledge or consent; that it waived performance of the contract by extending the time, and accepting performance after default had occurred, without notice, and by reason thereof the indemnity company was relieved from liability. At the trial, after both parties had rested, the court directed a verdict in favor of the defendant. Judgment was accordingly entered dismissing the complaint, from which and an order denying a motion for a new trial plaintiff appeals.
The cranes to be delivered under the contract were guar-' anteed to lift at least five tons at the rate of 60 feet per minute and then carry such weight along a cable to the place where the same was to be dumped at the rate af 600 feet per minute. The fact is not disputed that the Balanced Gable Crane Company broke its contract in several respects. It failed to furnish two of the cranes , and those which it did furnish-were not within the time specified, nor would they do the work stipulated to be done, and were so defective that they were finally discarded. Notwithstanding such failures, it is insisted the judgment is right, because (1) the plaintiff did not comply with the condition of the bond by giving immediate notice of the failure to furnish the cranes and of their defects at the time and in the manner called for by the contract; and (2) the plaintiff paid the full contract price for the four cranes which were delivered.
The first crane; as already seen, was to be erected and ready for operation on or before October 8, 1901, but in fact
*81was not delivered until October twenty-sixth. Notice, however, of the failure to deliver this crane at the time specified in the contract was given to the indemnity company on October ninth. The second crane was not delivered until November nineteenth; the third December eighteenth; the fourth December twenty-sixth; and the fifth and sixth were never delivered at all. No notice whatever of the failure to deliver the cranes, other than the first one, was given to the indemnity company until January seventh. On that day notice was given that two of the machines had not been delivered; that the other four did not comply with the requirements of the contract, nor were they delivered at the time and in the manner called for; and by reason of such failures damages would be claimed. This notice did not comply with the condition of the bond. That, it will be remembered, expressly provided that the indemnity company should not be liable unless it was immediately notified in writing of a breach of the contract. Had the contract been complied with, the last machine would have been delivered on November twelfth, and yet no notice was given until fifty-six days after the last machine should have been delivered, and more than sixty days as to the others, except the first. The failure to give this notice I think released the surety. Had immediate notice been given the surety company could have exercised its right to complete the contract or taken such measures as it saw fit to reduce the damages sought to be recovered in this action by reason of the delay. In any event it was entitled to immediate notice because its liability on the bond expressly so provided. The appellant, however, contends that whether the notice were given within the time mentioned in the bond was for the jury. Undoubtedly, where the facts are in dispute, or where different inferences may be drawn from undisputed facts as to whether or not a notice were immediately given, would be for the jury, but here there is no dispute as to the facts and different inferences cannot be drawn from them. Therefore, whether the notice were given within the time provided for in the bond became a question of law. (Pierson v. Crooks, 115 N. Y. 539; McManus v. Western Assurance Co., 43 App. Div. 550; affd., 167 N. Y. 602; National Surety Co. v. Long, 125 Fed. Rep. 887; Streeter v. Streeter, 43 Ill. 155.)
*82National Surety Co. v. Long (supra) is directly in point. There the agreed time for the completion of a building was the first of September. The contractor had then failed and was unable to perform his agreement in the time and manner specified, and the plaintiff knew it. He had agreed in such a case to immediately notify the surety company of these facts, but-he failed to give the notice until September twelfth, and the court said: “This failure Was a clear breach of his covenants. ‘ Immediately ’ means without the intervention of other events; forthwith; directly. A notice 11 days after the known failure of a contractor to complete the performance of his agreement is not an immediate notice thereof and it is not a compliance with the covenant and condition embodied in this contract. * * * It is said that the question whether or not this notice given 11 days after the known failure of the contractor was immediate notice was a question for the jury and was properly submitted for their consideration. * * * There may be cases where the question of the sufficiency of a notice in time and manner of service should be submitted to the consideration of the jury. Cases where the evidence is contradictory — where facts and circumstances are established which render doubtful the question whether or not there has been a fair compliance with the provisions of the contract in this regard — may authorize this course of procedure, but there is nothing of this character in the case at hand.” (See, also, United States Fidelity & Guaranty Co. v. Rice, 148 Fed. Rep. 206.)
Irrespective of the time of delivery of the four cranes, they did not comply With the contract in many respects. Not one of them had a lifting power of more than 2,500 pounds, . although the contract called for five tons. They were defective in many other respects and to such an extent they finally had to be discarded as useless. Damage is claimed upon this ground and yet no notice whatever was given of these defects until January seventh and the fact is undisputed that the plaintiff had knowledge' of them as soon as the machines were delivered. The failure to give notice of the defects until the seventh of January precludes the plaintiff from maintaining this action.
I am also of the opinion that full payment by the plaintiff of *83the four machines which were delivered estops it from claiming, as against the indemnity company, that they were not delivered in time or did not correspond to the terms of the contract. The contract provided final payment was to be made upon each machine when it was “ in place and in proper running order and condition and ready for operation.” Not one of them was ever ready for operation or complied with the contract, and yet the plaintiff accepted and paid for them as delivered. Had notice been given to the indemnity company and the payment withheld, then -under the terms of the bond, if it had elected to carry out the contract, it would have been entitled to such payments; in other words, the plaintiff by making these payments, which it was not obligated to do, changed the position of the indemnity company to its injury and thereby it was relieved from liability under its bond. (Smith v. Molleson, 148 N. Y. 241.)
The judgment and order appealed from, therefore, should be affirmed, with costs.
Dowling, J., concurred.
Judgment and order reversed, new trial ordered, costs to appellant to abide event.