Court Opinion

ID: 3605998
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:51:26.634898+00
Date Added: 2024-06-11T13:59:28.982304
License: Public Domain

I think that the only arguable point presented to this court by a proper exception has to do with the question of entire dependent covenants and substantial performance. Unquestionably plaintiff might have performed on its part and claimed substantial damages for delay in full performance by the city. Was it limited to such an action for damages or might it rescind?
When the contract was made in August, 1913, it was the letter of the agreement that on January first fourteen water-front dumps should be ready. The implied agreement was that the dumps known to both parties to be out of commission should be put in repair. The city was slow in getting four of them ready, but it was getting them ready when plaintiff undertook to rescind the contract. The city had showed not the slightest intention not to be bound by the contract nor to deliberately disregard its terms. Was its breach of minor importance or of such a material or essential character as to go to the root of the contract and excuse further performance by plaintiff?
"Where mutual covenants go to the whole of the consideration
on both sides, they are mutual conditions, the one precedent to the other; but where they go only to a part, where a breach maybe paid for in damages, there the defendant has a remedy on his covenant, and shall not plead it as a condition precedent." (Lord MANSFIELD in Boone v. Eyre, 1 H. Bl. 273 (note); Kauffman
v. Raeder, 108 Fed. Rep. 171, 179.) The principle thus established has been uniformly followed but its application varies *Page 422 
with the special circumstances of each case. It has recently been said by an eminent authority that the test is whether on the whole it is fairer to allow damages merely or to excuse performance entirely. (Williston on Contracts, section 841.)
On the evidence it does not clearly appear that the intention of the parties was that the delivery of the entire fourteen dumps on January first was a condition that went to the whole of the consideration on the other side, so that the failure to deliver promptly one, two, three or four dumps on that date, or by April eleventh following, gave the injured party the right to treat the entire contract as at an end and to recover damages for a total breach. The fact that the four dumps which were out of commission when the contract was signed were not ready on January first when plaintiff went into possession indicates that plaintiff would have been satisfied with damages for delay up to April eleventh at least if the four dumps had then been ready. One was ready on April 13, 1914, the date that plaintiff actually abandoned the work. One was completed May 15, 1914, one May 29, 1914, and one December 21, 1914. The trial judge thought the question of substantial failure to perform by the city was for the jury. Did the delay in completing the four dumps amount in law to a substantial impairment of plaintiff's entire consideration? Unless it can be said that plaintiff's promise to pay anything was absolutely dependent upon the delivery of all fourteen dumps on January first, plaintiff had no right to rescind after entering into possession except for such unreasonable delay on the part of the city as either evinced a disposition on its part not to perform until it had substantially defeated plaintiff's purpose in making the contract or had that result.
Was the delay so unreasonable that it cannot be fairly paid for in damages? The case resembles that arising when a landlord agrees to make repairs and where his breach *Page 423 
merely impairs the value of the premises, without destroying their use.
GAYNOR, J., says (Huber v. Ryan, 26 Misc. Rep. 428, 429): "did the landlord's breach of his covenant to improve or repair give the tenant the right to quit the demised premises and cease to pay the rent? Not unless the keeping of such covenant was acondition to the covenant to pay rent. Such a condition is not expressed in the lease, and the established rule of construction of leases seems to forbid that it be implied. If the tenant wants it he should have it expressed in the lease. The two covenants being independent of each other, the tenant may not elect to surrender the demised premises and end the lease for failure by the landlord to keep his covenant."
The contract in suit is not a lease and there was no express covenant to repair and it may be urged that in form the covenants are entire and dependent. It was, however, the intention of the parties that four dumps should be repaired and the intention of the parties is a controlling element as to whether the covenant in the agreement to have all fourteen dumps ready on a given date is dependent or independent.
"So many decisions have been made on the vexed question of what are, and what are not, dependent covenants, and so many of them are irreconcilable, that they rather perplex than aid the judgment in determining a given case. One rule is universal, and that is, that the intent of the parties is to control." (FOOT, J., in Grant v. Johnson, 5 N.Y. 247, 255.)
How does the case differ from an agreement to rent fourteen houses, some finished, some being constructed, beginning at a future day? The covenant to have all the houses ready is not a condition precedent to pay rent if the partial breach may be paid for in damages. That is, if one house is lacking a coat of paint which is being put on that is not a breach of a condition precedent. If one house only is ready, that is a breach of a condition *Page 424 
precedent. If the facts as to part performance are as in the case before us the question may be for the jury. I do not see that as matter of law the city's partial failure to perform on time was a large part of the consideration.
It may be noticed that the plaintiff when paying rent made no claim of total failure of consideration. It merely claimed that it was sustaining "a substantial loss" and asserted that paying rent in full was not a waiver of its rights under the contract. It makes no claim of any right to abandon the contract for breach and non-performance and impossibility of performance until April eleventh. This at least indicates that plaintiff considered damages only up to the latter date and made no prior claim of impossibility of performance on its part.
The judgment should be affirmed, with costs.
COLLIN and ANDREWS, JJ., concur with HISCOCK, Ch. J., and CARDOZO, J., concurs in result on ground last stated in opinion; POUND, J., reads dissenting memorandum in which CHASE and CRANE, JJ., concur.
Judgment reversed, etc.