Court Opinion

ID: 5209335
Source: CourtListenerOpinion
Date Created: 2022-01-06 16:09:12.008824+00
Date Added: 2024-06-11T08:27:20.633931
License: Public Domain

McLaughlin, J. (dissenting):
I dissent. A claim for liquidated damages must be enforced in its entirety of not at all. (Willis v. Webster, 1 App. Div. 301; Weeks v. Little, 89 N. Y. 566.) When the payment of some $4,000 was made to plaintiff in November, 1905, under the allegations of the counterclaim, which is for liquidated damages and nothing else, the liquidated damages had then accrued to such an amount that had they been deducted from the contract price the payment was in excess of the amount due ; and when the payment of $2,500 was made, after the work had been wholly completed, if the liquidated damages had been deducted, there was not only nothing due the plaintiff, but an actual balance due from it to Peirce.
There is no doubt about the general rule, as stated in the prevailing opinion, that payments made upon a contract and acceptance of the work do not prevent a party from setting up a counterclaim for failure to perform within the time specified in an action to recover the balance of the contract price, but payments which have been already made with full knowledge of the facts cannot be reclaimed. It seems to me, therefore, that the payments made, to say nothing of the letter, were a waiver of the claim for the stipulated damages. It is no answer to say that by the terms of the contract the damages were to be deducted from the final payment of fifteen per cent, which had not been made. The claim could not be enforced to that extent alone, and it further appears that payments had not been' *297made as provided in the contract. Since the plaintiff’s liability for stipulated damages could not be enforced in full, it could not be enforced at all, and the plaintiff would be liable only for the actual damage caused by the neglect in prosecuting the work. (Willis v. Webster, supra.) But no such claim was presented by the pleadings, and in this 'respect it seems to me that the prevailing opinion proceeds upon an erroneous theory in that it assumes that if the appellant Peirce cannot recover the stipulated amount of twenty-five dollars per day, then in that event he may recover the actual damage which he sustained. The parties expressly stipulated at the trial that if the letter and payments referred to were a waiver of the right of Peirce to claim damages by way of counterclaim for failure to complete within the time specified, then the plaintiff should have judgment. The only counterclaim pleaded was for the liquidated damages and neither party claims that these were unreasonable. Ho actual damage was alleged nor could such damage be proved under the allegations of the counterclaim. (Smith v. Vail, 53 App. Div. 628 ; affd., sub nom. Ludlum v. Vail, 166 N. Y. 611.)
Under such circumstances the court was right in giving judgment for plaintiff and I think the judgment should be affirmed.
Jndgment reversed, new trial ordered, with one bill of costs to appellants to abide event.