Court Opinion

ID: 5269053
Source: CourtListenerOpinion
Date Created: 2022-01-06 19:08:19.753738+00
Date Added: 2024-06-11T08:28:11.495155
License: Public Domain

Kiley, J. (dissenting):
This case was before this court on a former appeal (202 App. Div. 94). The facts and principles involved are very fully stated in the opinion; only brief references and recitals will be attempted here. The plaintiff, a contracting corporation, entered into a written agreement with the defendant to reconstruct, rebuild and change, according to plans and specifications furnished with said contract, a building in the city of Albany, N. Y. Said contract provided for a time limit on the work, and clause 8 thereof provided as follows: “ In case the party of the first part [who was this defendant] shall sustain any loss by way of damages of any kind by reason of the failure of the party of the second part to fulfill any of the agreements herein contained on its part, such loss or damage shall be deducted from the last payment made to the party of the second part as provided for herein.” Before making the contract aforesaid the defendant had rented the building, as it would be after the construction contemplated by the building contract was completed, for a large rental return, said lease and occupancy to commence after the time limit fixed for its completion in said building contract. He also sold said building subject to the *404terms of said lease and with reference to said time limit in the building contract. The plaintiff defaulted by not completing the-contract 'within the time limit fixed therein and defendant lost certain portions of the rent as in bis lease specified, and had to pay to the subsequent purchasers a like amount while it was kept out of possession by. reason of plaintiff’s default. When the contract was finally completed there was unpaid to the plaintiff thereon $2,011.17 which was the exact amount of the damage defendant had suffered by reason of plaintiff’s default. Under the clause in the building contract above quoted, the defendant withheld, such payment to satisfy his loss. The plaintiff brought this action, alleging generally for a balance due on the contract. The judgment demanded was for $2,011.17. The defendant -answered substantially admitting the allegations of plaintiff’s complaint, and. set forth the contract in full as part of his answer, and further 1 allegations of • fact • constituting his counterclaim. •. The plaintiff then replied, and. set up as a defense to plaintiff’s counterclaim -the following provision of The contract: “ excepting, however,. that if the party of the second part [the plaintiff herein] shall be delayed in performing said work or furnishing said material by reason of strike or strikes on the part of workmen or employees, or on the .'part of the workmen or employees of any subcontractor, then the time for the completion of said work shall be extended for a period equal to the duration of any such strike or strikes,” and alleging further that the failure of the plaintiff to complete said work within, the time limit fixed by said contract was due to such “ strike or strikes.” On the first trial the defendant gave evidence substantiating his counterclaim; the court struck out the evidence upon the grpund that plaintiff did .not have notice of the lease aforesaid and. the subsequent sale, and directed judgment for the plaintiff for the full amount, claimed. This court held that the trial court ■ fell into error; that the damages proved by the defendant- were, .such as might have been contemplated in-making the building contract; that there was no other damage that could have been contemplated ; that they were such as might naturally be expected to follow the default; that their nature was definite, and their source not in doubt. We . granted a new trial, because of the strike clause in the building contract and set up .in plaintiff’s reply as an affirmative defense to defendant’s counterclaim. As the case stood at the time a verdict was directed for plaintiff, there was no reason for withholding the relief prayed for in defendant’s answer, except the strike clause in the building contract. There are three questions left for our consideration upon this appeal: First, an exception taken to a portion of the judge’s charge to the jury; second, as to whether *405plaintiff excused its default by the evidence given under the strike clause of its contract; and third, the effect of an agreement between plaintiff and defendant to take down a certain wall which by the specifications was to be shored up during building operations. As to the first question, the alleged error of the trial court in the charge to the jury. In 202 Appellate Division (supra) it was held, as a matter of law, that the amount of the rents lost as a consequence of the failure on the part of the plaintiff to complete the contract within the time limit was the measure of the damage sustained by the defendant, and that, to escape liability therefor, plaintiff must make good its affirmative defense set up in its reply under the strike clause of its contract. The alleged error is found in the charge of the court where it was submitted, to the jury to say whether those damages sustained by the defendant were such as would be contemplated in making the contract, and as such might naturally be expected to follow a default. This was further emphasized in other parts of the charge. The exception to such charge presents error which calls for a reversal of the judgment. As to the second question, the defense under the. strike clause of the contract. The circumstances are briefly these: The Builders’ Exchange at Albany, of which this' plaintiff was a member at the time the contract in question was entered into between plaintiff and defendant, had a working agreement with the labor unions representing the different classes of labor employed in building operations; the working agreement was for the term of one year, which period would not expire until May 1, 1921, after the contract in question was executed. The compensation for labor necessary to do the work called for by this contract was as follows: Laborers, seventy cents an hour; carpenters, one dollar an hour; masons one dollar twelve and one-half cents and hour. Plaintiff made its estimate and took into consideration these figures in fixing the ..amount for which it would do the work when it entered into this contract. Before May 1,1921, the Builders’ Exchange fixed a new rate of wages, a reduction of twenty cents an hour. After May 1, 1921, the men would not work unless they were paid the same rate they were receiving when they commenced work upon the job, and they required a new yearly contract fixing that rate of wage. Plaintiff would not pay and the men would not work. Work stopped. We have this condition, that if the workmen accepted the new rate the plaintiff would increase its profit to that extent on its contract, the defendant would loose nothing, but if they refused to work at the reduced rate, by reason thereof, the defendant would be the only looser. There is involved in this second question the proposition do the circumstances abové narrated *406constitute such a strike as was contemplated by the clause of the contract above quoted? In other words, because the men would not work unless they could have the same wages they were receiving when they went on the job, and plaintiff insisting on the reduction, would not pay the old rate, a controversy to which defendant was not a party, must he suffer the damage caused by a failure to complete the job within the time limit? The plaintiff cannot set up its contract, or its inability to make a satisfactory contract with its own employees as an excuse for the non-fulfillment of its contract with the defendant. (McGovern v. City of New York, 234 N. Y. 377.) The plaintiff knew, because it was a party to it, of this inherent weakness in its ability to make a definite and absolute contract, and concealed it from the defendant; it was a constructive fraud upon defendant; plaintiff took the chance and cannot now be heard to complain. The plaintiff urges that what happened, as detailed above, was a strike and the condition contemplated under the strike clause of the contract; the defendant urges it was a “ lockout.” It may be called either that fancy dictates so long as it was caused by the plaintiff’s acts. The result was the same in either view so far as this case was concerned. Plaintiff agreed to do this work within a certain time; it was bound by its contract to fulfill or pay defendant’s damage. Default was made because plaintiff refused to pay the wages the workmen were receiving when the job was commenced. It could have averted the strike or lockout by paying the going rate of wage when the work was commenced; the failure to do so was the cause of defendant’s loss. Failure to perform is not excused. The third question involves two propositions : A. That the specifications called for the shoring up of a rear wall during operations on that side of the building; that on examination it was found that the wall was too thin to permit of shoring, and that it had to be taken down; this was agreed to by both parties. Although no such defense is pleaded in plaintiff’s reply it gave evi- ' dencethat it took twenty-six or twenty-seven days with three to five men to take it down and rebuild it; that it could have been taken down and rebuilt, if his original men had not refused to work, in fifteen days; that the shoring up contemplated by the specifications would have taken but four days. No evidence was given of increased cost to the plaintiff. Mr. Panzieri testified that no extra charge was made for that work when he had a settlement with defendant as to the amount still unpaid upon the contract, and that he received and accepted the certificate of the architect without any amount-included for the extra work; claim for the first time was presented on the second trial of this action. Such change, as was here made, is provided for in the 3d paragraph of the contract; the right of *407the contractor to receive compensation for extra work is governed by the last clause of said paragraph as follows: “ and the contractor shall present his claim for all such extra work, of whatsoever kind or character, at the first settlement or payment made by the party of the first part [this defendant] after the extra work was executed.” Plaintiff’s evidence is to the effect that no such claim was made and as a matter of course was not presented. Such charge for extra work could not be allowed under the evidence thereon in this record. (Fidelity & Casualty Co. v. City of Watervliet, 206 App. Div. 639.)
B. That the delay caused by this change in the work, together with defendant’s failure to exercise his right to take over and complete the contract under the provisions thereof, abrogated the time limit therein. Under the provisions of the contract and by reason of the written notice served on the plaintiff on May 9, 1921, I do not accede to that proposition. Even if that view were taken, defendant could still assert and succeed on his counterclaim. (Crocker-Wheeler Co. v. Varick Realty Co., 104 App. Div. 568; Reading Hardware Co. v. City of New York, 129 id. 292.) My conclusion is that defendant has sustained his counterclaim and, it being for the amount unpaid on the contract, it offsets plaintiff’s claim for balance unpaid.
The judgment should be reversed and complaint dismissed, with costs.
Judgment and order affirmed, with costs.