Court Opinion

ID: 3620467
Source: CourtListenerOpinion
Date Created: 2016-07-06 00:02:23.569555+00
Date Added: 2024-06-11T14:25:08.112874
License: Public Domain

I am of opinion that the rule of damages laid down by the judge at the circuit was erroneous. By the terms of the policy, the defendants contracted in effect that in case the insured premises should be destroyed by fire, they would make good the loss to the extent of three thousand dollars, or rebuild the edifice destroyed, at their option. But if they should elect to rebuild, instead of furnishing the indemnity by the payment of money, they were to give notice of their intention to do so within twenty days after receiving the preliminary proof of loss; and the work of rebuilding was to be performed within a reasonable time. The defendants gave the notice required, and proceeded to and did erect another building, conforming in a general way to the building which had been burned, but not substantially like that one, or equal in value to it.
I am of opinion that when the defendants had elected to provide the stipulated indemnity, by way of rebuilding, instead of the payment of money, and had entered upon the premises of the insured party, had taken possession of the materials which had been saved, and had commenced the erection of a building upon the site of the former one, that the contract then became one for rebuilding, and that the alternative which looked to the payment of money became obsolete and inapplicable, and that the case then became the same which it would have been if the contract had obliged the defendant simply to rebuild in case of a loss. The insurers, *Page 456 
having a proper regard to their own interest, should not, under such a policy as this, elect to rebuild, unless the case is such that they can, with the same or a less amount of money than the sum insured, procure as good an edifice to be erected as the one which had been destroyed; but if they will, by availing themselves of the option, undertake to rebuild, they are bound to do so, at any expense which may be necessary, though it should exceed the amount insured. That amount has no longer any connection with the case, and cannot be made use of to test the quality or completeness of the new building, or to regulate the recovery in case of a failure to perform. Hence, where the amount of the pecuniary indemnity named in the policy is less than the value of the building insured and burned, it is just as unwise in the insurers to embrace the option to rebuild, as it would be to agree in the first instance for the same premium absolutely to rebuild. By electing to rebuild under a policy in the alternative, a new contract, in a certain sense, is made. What was before alternative and optional becomes fixed and certain. An agreement to make good the loss in money, not exceeding the amount insured, is changed into a positive contract to erect another similar building. I do not mean one precisely identical, but one substantially like it, and so far identical as one can practically be made. Upon the question of correspondence between the old and the new building, as well as in regard to the following of the plans furnished by and the directions given by the assured, I adopt the instructions of the judge who presided at the trial, as a careful and discriminating view of the case.
It follows from the foregoing views that the amount of money which was in a certain event to have been paid, was not, as was thought by the judge who dissented, a proper limitation of the amount of the recovery, and that the loss sustained by its destruction was not a precisely accurate measure of damages in case of the failure to rebuild. The latter would approximate to the true rule, though the more accurate one would be what it would cost to rebuild the edifice. *Page 457 
Although the contract had become one which obliged the defendants simply to rebuild, it was not like an ordinary building contract, where the compensation, or any part of it, is to be paid upon the completion of the work. In such cases a full performance, in substantial conformity with the terms of the agreement, is a condition precedent to a recovery on the contract; and it has been held, by a series of decisions in this State, culminating in Smith v. Brady (17 N.Y., 173), that where there has been a failure thus to perform, the builder cannot recover for what he has done, upon the footing of aquantum meruit. But this was not the case of a payment agreed to be made upon the performance of a condition. The consideration of the defendant's obligation has been paid by the plaintiff in advance. The contract was completely executed on his part, and the cases in which a recovery is defeated by the non-performance of a condition precedent have no direct application. The question is, whether a party who has contracted to erect a building on the land of another, and has been paid the consideration in advance, and has put up a building in professed compliance with the contract, and corresponding in its principal features with its provisions, though not literally or substantially a full compliance with its requirements, is obliged to pay the same amount of damages as though he had done nothing towards performance. I lay out of view cases of a fraudulent, or merely colorable pretense of performance, for there is no reason to question the good faith of the defendants, nor that the want of full performance was the fault of their contractor, or his mechanics, or the result of ignorance or misapprehension on their part; and I am of opinion that, in a case free from such embarrassments, the same damages should not be recovered as in one where there has been a total failure to perform. The class of cases referred to in the opinion of the court, in Smith v.Brady, depend upon the principle that where payment, by the terms of the contract, is to be made only upon the performance of a condition precedent, there can be no recovery except such condition be performed, and upon the further principle that where there is an express contract, an *Page 458 
implied one cannot be established. These rules are technical ones, and should not be applied by any supposed analogy where the reasons upon which they were established do not exist. InChamplin v. Rowley (18 Wend., 187), where the plaintiff had agreed to deliver a specified quantity of hay at a given price, and only delivered part, and brought an action for the value of that part, it was held that he could not recover, the delivery of the whole being considered a condition precedent to the payment. Chancellor WALWORTH, who delivered the only opinion in the case, placed the judgment upon these grounds, and upon a uniform course of decision in this State in the same direction, but he said that if courts of justice were at liberty to make new laws instead of administering those which were already in existence, or if the case before him presented a new question, he could see no objection to the application of principles of equity to the case. This theoretical rule and these precedents having no application to a case situated like the present, it would be most unreasonable to apply to it a doctrine not founded on equity, upon the idea of an analogy which does not really exist. It is not true that an imperfect or incomplete performance of a duty imposed by a contract, or by the law, is, under all circumstances, a nullity. If it were so, what would become of the principle of part payment, which is a defense pro tanto as well at law as in equity. The distinction to which I refer may be illustrated by the case of the contract to deliver hay, just mentioned. Let us suppose that payment for the whole quantity contracted for had been made in advance, and that it was to be delivered in parcels, as was the fact in the case reported; could the vendee, in a suit brought by him, recover for the whole quantity contracted for, when he had received and converted a part? It would be against common reason and common sense to allow him to do so. The same illustrations would apply to all the cases of this class. One agrees, for instance, to serve another for a year, for a certain yearly sum, and works eleven months. He cannot recover anything, because the entire performance was a condition precedent to the payment. But suppose, upon some adequate consideration *Page 459 
already realized, the laborer should agree to serve for a year, and should leave without excuse, after having worked eleven months, could the party to whom the labor was due, recover as though no work had been done? Plainly he could not. I feel confident that the rule applicable to the non-performance of conditions has nothing to do with this case. Should it be said that the distinction which I propose to adopt would enable insurance companies, and other parties similarly circumstanced, to impose upon the other party a thing which they did not want, and had never contracted for, the answer, I think, would be, that a jury would always be enabled to adjust the damages according to the substantial justice of the case. If the performance was fraudulent or colorable, nothing ought to be allowed. If practically worthless or useless to the party for whom it was done, the same consequences would follow. But if, in an erection which would cost three thousand dollars, there was a fault or incompleteness which could be remedied by the expenditure of one hundred dollars, the jury would give the builder the benefit of what he had done, making the other party a liberal allowance for what remained to be done, or had been improperly done.
I have thus far omitted any reference to the fact that there were two policies on this property, and that both companies elected to rebuild. This does not, in my opinion, involve the necessity of bringing a joint action against both, though I do not say that such an action could not have been maintained for the purpose of adjusting the equities among the parties. The two companies had done everything towards rebuilding which they proposed to do, and both maintain that the burned building had been rebuilt. In electing to rebuild, each company had relied upon the other to contribute to the expense in proportion to the amount insured. The plaintiff had a right to have a completed building, and if this has not been entirely done, he is entitled to recover damages against either of the companies, sufficient merely to make a completed building. Should the company prosecuted claim that it had done its part, and that the delinquency was attributable to the other company, he could maintain an *Page 460 
action against that company in the nature of a suit for contribution. But his undertaking to rebuild being absolute, I do not think he could defend himself against the assured by showing that the fault was that of the other company.
I am for reversing the judgment, and ordering a new trial, upon the principles stated.
Judgment reversed, and new trial ordered. *Page 461