text:
    Chancey Cramer Resp’t. v. John F. Lovejoy, Appl’t.

      (Supreme Court, General Term, Fifth Department,

      Filed October, 1886.)
    1 PleaeiNGs — Amendment — Extent of poweR — Power of county couet CO-EXTENSIVE "WITH THAT OF THE SUPREME COUET.
    The complaint alleged the making of a promissory note and its endorsement by defendant, the answer denied the complaint and alleged that the defendant was not notified of the presentation and non-payment of the note. The cause was tried in a justice’s court and judgment rendered against defendant for the amount of the note. The defendant appealed to the county court, where the cause was tried before a jury upon the pleadings used in the court below, and plaintiff recovered a verdict for the amount of the note, upon which judgment was entered from which the defendant appealed to this court, where the judgment was reversed and new trial ordered in the county court. The cause was there again tried, without a jury.
    At the commencement of the second trial, the plaintiff was permitted, against defendant’s objection and exception, to amend his complaint by alleging a cause of action for money lent and also alleging that the promissory note set out in the original complaint was left with plaintiff by defendant, as security for the loan. The court found the facts as alleged in the amended complaint and ordered judgment in plaintiff’s favor. Held, that the power of the court to make the amendment on the trial, could not be successfully questioned and that the power of the county court in that respect was as broad as that of the supreme. That it might be exercised even to the extent of adding new causes of' action though thereby the statute of limitations might be avoided, as was claimed to be the case in this instance.
    2. Same — Code Civ. Peo., § 123 — Limitations to power of amendment.
    The exercise of the power in furtherance of justice sanctioned by Code Civ. Pro., § 723, being only limited in this, that when the amendment is effected by conforming the pleading to the facts proved, no substantial change of the claim or defense is permitted, and in all cases, the amendment must be on such terms as the court deem just.
    3.- Same — Supreme courts power to review amendment allowed by COUNTY COUET.
    The action of the county court is reviewable on appeal to the supreme court.
    4. Supreme couet may review oedees of county court affecting substantial RIGHT.
    An order of the county court affecting a substantial right may be reviewed on appeal to the supreme court, even though resting in discretion.
    5. Modification of judgment on appeal to conform to -teems which SHOULD HAVE BEEN IMPOSED ON ALLOWANCE OF AMENDMENT.

      Held, that the judgment of the County Court should be refused unless plaintiff would stipulate that it be modified by striking out all costs and disbursements allowed to plaintiff from the time of service of defendant’s answer to the original complaint to the time of the amendment of the complaint, and by allowing to the defendant his costs and disbursements during that period, such costs to be set off against the plaintiff’s damages and costs, and the party entitled to the excess to have judgment therefor, in which ease the judgment should be modified accordingly, and, so modified, affirmed without costs of the appeal to either party.
    Appeal from a judgment of tlie Cayuga County Court, entered on the decision of the court upon a trial without a jury.

      Jacob B. Becker, for appl’t; II. V. Howland, for resp’t.
   Smith, P. J.

This action was commenced in a justices’ court. The complaint was as follows : “ The plaintiff complains of the defendant, and alleges that one B. F. Pomeroy, on the 19th day of Noy., 1875, made his promissory note for one hundred dollars, payable to It. Gr. LoYejoy or bearer, one year from date, and endorsed on the back by John F. Lovejoy, the defendant.” The defendant’s answer denied the complaint and alleged that he was not notified of the presentation and non-payment of the note. The cause was tried in the justices’ court, and judgment was rendered against the defendant for the amount of the note. The defendant appealed to the county court where the cause was tried before a jury, upon the pleadings interposed in the justices’ court, and the plaintiff recovered a verdict for the amount of the note, upon which judgment was entered from which the defendant appealed to this court. The judgment was reversed and a new trial ordered in the county court. The cause was again tried in that court, without a jury. At the commencement of the second trial, the plaintiff was permitted, against the objection and exception of the defendant, to amend his complaint by alleging a cause of action for one hundred dollars, money lent in August, 1876, and also alleging that the said promissory note set out in the original complaint was left with the plaintiff by the defendant as security for the loan. The court found the facts as alleged in the amended complaint, and ordered judgment in favor of the plaintiff for one hundred dollars, with interest from the last day of August, 1876. From that judgment this appeal is taken.

The principal question relates to the propriety of the amendment. We do not think the power of the court to allow the amendment, at the trial, can be successfully questioned. The power- of the county court in that respect is as broad as is the power of this, court. It is an inherent power, which has often been exercised to the extent of amending the complaint by adding new causes of action, although by so doing, the statute of limitations is avoided, as is said to be the case here. Hatch v. The Central National Bank, 78 N. Y., 487. Its exercise in furtherance of justice, is authorized by section 723 of the present Code, the- only limitations thereby prescribed being that when the-amendment is effected by conforming the pleading to the facts proved, no substantial change of the claim or defence is permitted, and in all cases the amendment must be on such terms as the- court deems just.

The-serious, question in this case arises upon the latter limitation. No terms whatever were imposed as a condition of the amendment, and the consequence is that the costs of the entire litigation, including those of the first appeal to this court in which the defendant was successful, are thrown upon him. This seems unjust, and the injustice is the more apparent when we consider the nature of the issue upon which the litigation turned from tbe commencement of tbe action np to tbe termination of that appeal. The only claim for which tbe plaintiff contended np to that time was, that tbe defendant bad waived notice of protest and was liable as endorser, and upon that issue tbe defendant bad ultimately succeeded. That being tbe case, we think that in the exercise of a just discretion, tbe plaintiff should have been required to pay tbe defendant’s costs from tbe time of serving bis answer to the original complaint, as a condition of tbe amendment, since be bad succeeded upon the issue thereby tendered, and the present recovery is solely upon tbe cause of action introduced by tbe amendment.

It is suggested by the respondent’s counsel that the original complaint was defective, and presented no cause of action, and therefore an amendment was necessary. But tbe plaintiff bad gone to trial upon it in two courts, without asking to be permitted to amend, and under it be had recovered of tbe defendant as the endorser of tbe note set out in the complaint. Had tbe amendment simply permitted him to perfect bis cause of action upon tbe endorsement by alleging notice or waiver, tbe case would have been very different, in respect to tbe terms of tbe amendment.

Again, it is suggested by tbe respondent’s counsel, that the testimony given on tbe part of tbe plaintiff was substantially the same as that given on the last trial.' It is true that tbe testimony given on each trial related to the same interviews and conversations between tbe parties, but tbe version given by the plaintiff and bis witnesses on tbe first trial, tended to- show that tbe plaintiff’s right of action was upon the note, while upon tbe second trial, tbe transaction was made to appear as a loan, for which tbe note was a mere collateral security. On the first trial, tbe claim and tbe recovery were for tbe amount of tbe note, with interest upon it from its date, the 19th of November; on tbe second trial, the claim and recovery were limited to the sum alleged to have been loaned, with interest from tbe time ef the loan, about nine months subsequent to the date of tbe note.

We think tbe action of tbe county court in this particular, is reviewable here. An appeal lies to this court from an order of the county court affecting a-substantial right. (Code C. P., §. 1342.) On the same ground an appeal lies to tbe general term from an order of the special term, (§. 1347, subd. 4.) Such an order has been held to be appealable, though resting in discretion. (Hand v. Burrows, 15 Hun, 481.) In that respect, tbe appellate jurisdiction of this court differs from that of the Court of Appeals, which is limited to an order affecting a substantial right and not resting in discretion. (Code C. P., §. 190, subd. 2.) The case of Hand v. Burrows, (sup.) is an authority for saying that a question of terms is reviewable by the general term when it affects a substantial right. Here, the defendant bad been awarded tbe costs of his appeal to the general term, “ to abide the event.” The “ event ” contemplated was the event of the issne involved in the appeal to the ^general term, and uponthatissue the defendant finally succeeded, the plaintiff having abandoned and virtually discontinued the action, so -far as that issue was concerned, after the decision of the general term. As the order of the county court granting the amendment unconditionally, deprived the defendant of those costs, it affects a substantial right. The case of Rielly v. President, &c., (5 East Rep., 706), whichholds that the supreme court at general term, has no power to reverse the judgment of a county court on the ground of excessive damages, does not stand in the way of this appeal. That case proceeds upon the well established rule that upon an appeal from a judgment of an inferior court, under the Code, as upon a writ of error under the old practice, only errors of the court, and not errors of the jury can be reviewed. It was properly held that § 1342 of the Code did not apply to the case, because the appeal was not from an order. The remark contained in the last paragraph of the opinion, as to what would have been the effect if the appeal had been from an order was obiter, but even regarding it as an authoritative adjudication, it does not relate to an order which,, as in this case, deprives a party of a fixed right.

The result is that the judgment should be reversed, with costs of this appeal to the defendant, unless the plaintiff will stipulate that the judgment be modified by striking out all costs and disbursements allowed to the plaintiff, from the time of the service of defendant’s answer to the original complaint, to the time of the amendment of the complaint, and by allowing to the defendant his costs and disbursements accrued during that period, such costs to be set off against the plaintiff’s damages and costs, and the party entitled to the excess, to have judgment therefor, in which case, the judgment is to be modified accordingly, and as so modified, affirmed without costs of this appeal to either party.

The direction for a reversal, (in case the plaintiff does not stipulate to modify, etc.,) without granting a new trial, is made at the suggestion of the plaintiff’s counsel, to enable him to sue again, if so advised, under section 405 of the Code of Civil Procedure.

Banker, Haight and Bradley, JJ., concur.

So ordered.


source: Caselaw Access Project

author: Smith, P. J.

license: Public Domain

text:
    Elias A. Mead, Resp’t, v. Charles E. Parker, Appl’t.

      (Supreme Court, General Term, Fifth Department,

      Filed October, 1886.)
    Evidence — Guaranty — What is original contract — Parol evidence ADMISSIBLE TO PROVE WAIVER OP CONDITION IN CONTRACT NOT REQUIRED BY STATUTE TO BE IN WRITING.
    Defendant, who was the owner of a bond and mortgage, sold and transferred them to one J. for a sum of money, and by an instrument in writing defendant guaranteed their collection. J. thereafter transferred the bond, mortgage, and the defendant’s guaranty to the plaintiff, and he having foreclosed the mortgage and obtained a judgment for a deficiency upon which an execution has been issued and returned unsatisfied, brought this suit upon the guaranty. It was defended on the ground that plaintiff was not reasonably diligent in his efforts to collect. Plaintiff at the trial introduced parol evidence for the purpose of showing that defendant consented to the delay and waived performance of the condition of the guaranty. Against the contention of defendant that as the guaranty was a promise to answer for the (debt of another and necessarily put in writing to satisfy the requirement of the statute of frauds and that parol evidence of such a contract and waiver' was inadmissible. Held, that it was not necessary to the validity of the ■guaranty that it should be in writing. That it was not a collateral but an ■original undertaking; not to answer for the debt of another, but an agreement in which the promisor was principal. The agreement of the defendant, therefore being one which was not required by statute to be in writing it falls within the general rule respecting the admission of parol proof to show ■an extension of the time of performance or a waiver of one or more of the conditions of an agreement which by the voluntary act of the parties, but not by requirement of statute, is put in writing, and parol proof was admissible for that purpose.
    Appeal from a judgment on a verdict rendered at tbe Caynga circuit, and from a special term order, denying a motion for a new trial, made on a case.

      James R. Cox, for appl’t; H. V. Howland, for resp’t.
   Smith, P. J.

The defendant, who was the owner of a bond :-and a mortgage collateral thereto, executed by Lewis Paddock, sold and transferred them to Cordial S. Jennings, in consi deration • of the sum of seventeen hundred dollars, paid by him to the defendant therefor, and by an instrument in writing defendant guaranteed their collection. Jennings transferred the bond and mortgage, and the defendant’s guaranty to the plaintiff, and he having foreclosed the mortgage and obtained a judgment for a deficiency upon which an execution has been issued and returned unsatisfied, has brought this suit upon the guaranty. The suit is defended on the ground that the plaintiff has .not been reasonably diligent in his efforts to collect. There .appears to have been a delay of about two and a half years after the maturity of the bond and mortgage before the foreclosure was instituted. At the trial, the plaintiff introduced parol -evidence for the purpose of showing that the defendant consented to the delay, and waived performance of the condition of the guaranty which the law' implies that the assignee of the bond and mortgage should proceed with reasonable diligence to collect them.

It is contended by the counsel for the appellant that, as the guaranty was a promise to answer for the debt of another, it was necessarily put in writing to satisfy the requirement of the statute of frauds, and parol evidence of such consent and waiver is inadmissible. This case was before us on a former appeal, and it was then held that the reception of' parol proof tending to show such consent and waiver subsequent to the making of the guaranty, was not error. (MS. op. of Bradley, J., Jan. 1., 1885.) We adhere to that ruling.

But it was not necessary to the validity of the defendant’s guaranty that it should have been in writing. The complaint alleges, and the answer admits by not denying, that the guaranty was executed by the defendant, upon a sale and transfer by him of the bond and mortgage for a valuable consideration paid to him by the purchaser. It was, therefore, not a collateral, but an original undertaking; not a promise to answer for the debt of another, but an agreement in which the promisor was the principal. Such an undertaking is not within the statute. The-case is analogous to that of Milk v. Rich, decided in the fourth department, (15 Hun, 178,) and affirmed in the court of appeals, (80 N. Y., 269.) Several other cases to the same effect are cited by Earl, J., in Milk v. Rich, (p. 271.) The agreement of the defendant being one which was not required by statute to be in writing, the case falls within the general rule respecting the admission of parol proof to show an extension of the time of performance, or a waiver of one or more of the conditions of an agreement, which, by the voluntary act of the parties, but not by the requirement of statute, is put in writing. That parol proof is admissible for such purpose has long been the law in this State. (Fleming v. Gilbert, 3 Johns., 528; The Mayor v. Buller, 1 Barb., 325; Esmond v. Van Benschoten, 12 Barb., 366; Stone v. Sprague, 20 Barb., 509.)

The evidence was sufficient, we think, to authorize the jury to find that the defendant consented to the delay.

The judgment and order should be affirmed.

Barker, Haight and Brajdley, JJ., concur.

Affirmed.


text:
    Matter of the judicial settlement of the accounts of John B. Collamer, Ex’r, etc., of Isaac Smith, dec’d.

      (Supreme Court, General Term, Fifth Department,

      Filed October, 1886.)
    1. EXECUTORS AND ADMINISTRATORS — COSTS — AwARD OP TO EXECUTOR ON ACCOUNTING DISCRETIONARY WITH SURROGATE — CODE ClV. PRO., § 2562.
    The testator died, in September, 1876, leaving real and personal property, and a will in which he appointed the appellant J. B. C. sole executor, he left a wife and several children him surviving. The will gave to the widow all loose property and also the interest as it shall be paid each and every year during her natural life, on what money and on all moneys he might have at interest at the time of his death. The will was proven and letters testamentary issued to the appellant in January, 1877. The executor filed his petition for a settlement of his accounts on October 26th, 1878, and on November 22nd, 1S78, having presented an account, took a decree settling his accounts. By this, a balance was found on the estate of $ 8,615, upon which the widow is entitled to interest during her life time. The widow on June 6th, 1883, filed her petition and obtained a citation requiring the executor to account. Thereupon he on June 19th, 18S3, filed his own petition for a judicial settlement of his accounts. These were heard together. The executor filed his answer to the respondent’s petition, and filed his account in connection with his own petition. Objections were made to the account and a reference ordered to examine the account and report to the Surrogates’ court. Upon motion of the respondent the decree of November, 1878, was vacated on September, 5th, 1883. The decree upon the final accounting adjudged that the sum in the hands of the executor upon which interest should he computed was at the time of settlement November, 1878, $8,773.-40, instead of $8,615.10 as fixed and that the executor be charged with the deficiency. It also directed payment to the widow or her counsel of $300 as costs and counsel fees and that he retain $64 therefrom, heretofore paid as fees of the referee herein. Also that respondent was entitled to be paid annually according to the terms of said will, interest to be computed from April, 10th, 1884, on the amount of the principal of $8,773.40 after deducting executor’s commissions, thesaid allowance of $300 and $64 referee’s fees. No costs were allowed the executor. Appellant contended that the decree was erroneous in not allowing to the executor costs byway of indemnity for the expense and trouble of defending his proceedings against the attacks made by the contestant on the accounting. Held, that the granting of such costs is by Code Civ. Pro., § 2562, made discretionary with the surrogate, and that the executor having interposed as a bar the decree of November, 1878, which was irregular for want of due service upon the parties interested, and thereby added largely to the expense and trouble of the contestant in the accounting, it could not be said that the surrogate had abused his discretion.
    2. Same — 'To contestant — Discretion as to allowance and amount rests with surrogate — Code Civ. Pro., §§ 2558, 2561.
    Costs having been awarded to the contestant out of the estate and not against the exeentor personally. Held, that conceding that the executor though not personally charged" may question the propriety of the allowance as trustee and representative of the residuary legatees, yet, in this case, the surrogate had discretionary power and that there was no evidence that it had been exceeded. That the award of costs except in certain cases not including the one in question, was in the discretion of the surrogate. Code Civ. Pro., § 2558. That within certain limits the amount of costs awarded was also discretionary. Code Civ. Pro., § 2561.
    3. Same — Limits imposed on the discretionary power — Bule for COMPUTING AMOUNT — METHOD OP CORRECTING EXCESSIVE ALLOWANCE.
    Where there has been a contest the surrogate may award in his discretion costs not exceeding $70, and in addition thereto, when a trial or hearing upon the merits before the surrogate necessarily occupies more than two days, ten dollars for each additional day, Code Civ. Pro., § 2561. In this case it did not appear affirmatively from tlie record, how many days were occupied in the hearing before the surrogate. Held, that the timé necessarily spent in the trial or hearing before the surrogate himself, might be adopted as the basis of taxation, there being nothing in the record showing that such time of itself was not a sufficient basis for the allowances. That, if it were not, the remedy of the appellant was by moving upon an affidavit showing the actual number of days spent, to correct the allowance contained in the decree. Code Civ. Pro., § 25TO.
    4. Same — Interest — Date from which to be computeb.
    The decree provided that the respondent was entitled to be paid annually according to the terms of the will, the interest on 88,277.26 to be computed from April, 10th, 1884. Held, that this did not require the executor to pay the interest whether he received it or not. That the date from which interest should be paid was arbitrarily fixed in the decree. That as the will did not specify a date from which interest should be computed, the law fixed the day of the death of the testator for that purpose.
    Appeal by tbe executor from a decree of the Surrogate of Monroe County on the judicial settlement of the accounts of such executor.

      J. A. Stull, for the executor, appl’t; J. Q. Van VoorMs, for Mary Ann Smith, legatee and petitioner, resp’t.
   Smith, P. J.

Isaac Smith died in September, 1876, leaving real and personal property, and a will, in which he appointed the appellant, John B. Collamer, his son-in-law, sole executor. He left Mary Ann Smith, the respondent, his widow, and Alice I). Collamer, Charles H. Smith and Willie Smith, an infant, his children and only heirs at law.

By his will, the deceased gave to the widow the household furniture, team, stock, tools, and other loose property. He also gave her “ the interest as it shall be paid each and every year during her natural life on what money and on all moneys I have or may have at interest at the time of my death.”

He gave certain property to his children, and the widow was made general guardian of his infant son, and was to have charge of his support.

The will was proved and letters testamentary were issued to the appellant, in January, 1877. On the 26th of October, 1878, the executor filed his petition for a settlement of his accounts, and on the 22d of November, 1878, having presented an account, he took a decree settling his accounts. That decree found “ a balance due the estate of 18,615.10, upon winch the widow is entitled to interest during her lifetime.” On the 6th of June, 1883, the widow, not being satisfied with the executor’s doings, filed her petition and obtained a citation requiring the executor to account. Thereupon, the executor, on the 19th of June, 1883, filed his own petition for. a judicial settlement of his. accounts. The two petitions were heard together. The executor filed his answer to the respondent’s petition, and filed his account in connection with his own petition. Objections were made to the account, and a reference was ordered to examine the account and report to the surrogate’s court. On' the hearing before the referee, the executor took the position that the decree of 22d November, 1878, was conclusive, and no investigation of accounts back of that could be had. Thereupon the respondent filed a petition and made a motion before the Surrogate, to vacate the decree of November, 1878, and the motion was granted and that decree vacated, on the 5th of September, 1883. The accounting then proceeded before the referee, who afterwards filed his report.

Upon the hearing before the surrogate after the filing of the report, the surrogate disallowed an item of $185.14, the amount of an asset known as the “ Shay” note, with interest, with which the referee charged the executor. Notwithstanding that disallowance, the surrogate, by his decree, adjudged that the principal sum in the hands of the executor upon which interest should be computed, was, at the time of his settlement in November, 1878, $8,773.40 instead of $8,615.10 as fixed in that settlement, and he charged the executor with the deficiency. The decree also made a slight reduction in the commissions allowed to the executor. ■ The decree directed the executor to pay to the widow or her counsel, out of the said principal of the estate, “as and for her costs, and for fees to counsel in this proceeding the sum of $300, at which sum said costs and counsel fees are fixed and allowed, and that he retain therefrom the sum of $64. heretofore paid as the fees of the referee herein.” The decree also adjudged that the respondent “ is entitled to be paid annually, according-to the terms of said will, the interest to be computed from April 10th, 1884, “ on the amount of the principal of $ 8,773.40, after deducting the executor’s commissions, the said allowance of $300 for the respondent’s costs and counsel fees, and $ 64, referee’s fees. No costs were allowed to the executor.

The appellant’s counsel contends that the decree is erroneous in not allowing to the executor costs by way of indemnity for the expense and trouble to which he was subjected in defending his proceedings against the attacks made upon them by the contestant in the accounting. The answer to that contention, we think, is, that the granting of such costs is discretionary with the surrogate, (Code C. P., §. 2562.) the appellant suggests that the discretion was abused, but we find no evidence of that. It is true, the executor succeeded in part before the referee and also before the surrogate, but he also failed in part, and by interposing the decree of November, 1878, as a bar, which, it seems, was irregular for the want of due service upon parties interested, he added largely to the expense and trouble of thé contestant in the accounting, and delayed the proceeding. In view of the circumstances, it is impossible to say that the surrogate abused his discretion.

Next, it is contended that the surrogate erred in his allowance of costs to the contestant. They are not decreed against the executor personally, but are to be paid out of the principal of the estate. If it be conceded that the executor, although not personally charged, may question the propriety of the allowance, as the trustee and representative of the residuary legatees, still we think, that in this particular also, the surrogate had discretionary power, and there is no evidence that his power was exceeded or his discretion abused. By section 2558, of the Code of Civil Procedure, the award of costs in a surrogate’s decree is in the discretion of the surrogate, with certain exceptions specified in the section, neither of which embraces a case like the one before us. Not only is it thus discretionary with the surrogate to award costs, that is, to determine whether any, and which, of the parties is entitled to costs, but also to determine the amount of costs, within certain limits, except the costs awarded upon a jury trial, and the costs of an appeal. In the former of the cases so excepted, the costs awarded in the surrogate’s court are the same as the taxable costs in an action in the supreme court, in the latter, the same as if they were awarded in the supreme court. (Code, §. 2560.) In cases other than those within the two exceptions above pointed out, the limits within which the discretion of the surrogate may be exercised are prescribed by section 2561 of the Code. He may fix "such a sum, as costs, in addition to disbursements, as he deems reasonable, not exceeding twenty five dollars, where there has not been a contest, or seventy dollars where there has been a contest and in addition thereto, where a trial or hearing upon the merits before the surrogate necessarily occupies more than two days, ten dollars for each additional day ; and where a motion for a new trial is made before the surrogate, if it is granted, seventy dollars; if it is denied, forty dollars.” In this case, it does not appear affirmatively, so far as we have been able to discover from the record, how many days were occupied in the hearing before the surrogate. If the number of days occupied in the examination before the referee were to control the number of days for which the referee charged fees, might be regarded as evidence. He charged for sixteen days. But the time occupied in the trial or hearing before the surrogate is the guide. Whether the trial or hearing before the referee is to be regarded as a trial or hearing before the surrogate, within the meaning of section 2561, is a question of some doubt. The word “surrogate ” as there used, is defined in the Code as including “ every officer or court vested by law with the functions of surrogate.” (§. 2514, Subd. 7.) But this definition gives rise to another question, namely, whether the officers or courts referred to therein as being vested with the functions of surrogate, are those only upon whom functions of surrogate, are conferred by certain preceding sections of tbe Code contained in article second of the same chapter; or whether they embrace a referee appointed by the surrogate to examine an account and report to the court. Section 2546 of the Code is intended to define the powers of such a referee. That section provides that in a “ special proceeding, other than one instituted for probate, or revocation of probate, of a will, the surrogate may appoint a referee ... to examine an account rendered, to hear and determine all questions arising upon the settlement of such an account, which the surrogate has power to determine.” Thus far, the provisions of the section would seem to indicate that the referee is so far vested with the functions of the surrogate, as that his determination of the matters referred to him is final in that court. But the next clause in the section provides that the referee is to make a report subject, however, to confirmation by the surrogate. That is followed by a provision that “such a referee has the same power, ... as a referee appointed by the supreme court, for the trial of an issue of fact in an action ; and the provisions of this act, applicable to a reference by the supreme court, apply to a reference made as prescribed in this section, so far as they can be applied in substance, without regard to the form of the proceeding.” But in certain actions in the supreme court, a referee appointed to hear and determine the issue has the powers and functions of the court in that respect, and judgment may be entered directly upon his report which can only be reviewed by appeal, while, in others, the report of the referee must be confirmed by the court, before judgment can be entered upon it. So that it is not easy to decide whether the trial or hearing before the referee in this case is to be regarded as a trial or hearing before the surrogate, within the meaning of section 2561. But the question is probably not material to the case, and we do not decide it. For in any event, the time necessarily spent in the trial or hearing, before the surrogate himself, may be adopted as a basis of taxation, and there is nothing in the record to show but that such time, of itself, furnishes a sufficient basis for the allowance. If it did not, the remedy of the appellant was to move, upon an affidavit showing the actual number of days spent, to correct the allowance contained in the decree, and if the motion had been decided adversely to him, he might have appealed from the order. (Code, §. 2570.) If it affirmatively appeared that the allowance exceeded the limits set by the Code, we could reverse for that reason, but with the exercise of the discretion of the surrogate, within the statutory bounds, we cannot interfere.

An objection is taken to the referee’s method of computing interest, in that he made no deduction or allowance for uninvested funds, or periods of idleness between investments when interest was not earned, or where there was a loss of interest on deposits in savings banks from the occurrence of “ quarter days ” between which, on deposit or withdrawal of funds, no interest is paid. The points of the appellant’s counsel do not refer as to any evidence of an interval in the investment of any particular sum, and upon a somewhat careful examination of the case we have found none. The executor, in his testimony, speaks of having paid to the widow “ interest on uninvested funds,” but we are not aware of any proof that the executor has been charged with interest which he did not receive, or which, with reasonable diligence, he might have received, on the funds in his hands.

The only remaining question is, whether the decree should be modified in respect to the further payment of interest by the executor to the respondent. The decree provides that the respondent is entitled to be paid annually, according to the terms of the will, the interest on $8,277.26 to be computed from April 10th, 1884. This does not absolutely require the appellant, as his counsel seems to suppose, to pay the interest whether he receives it or not. Interest is to be paid according to the terms of the will; and the will gives to the widow the interest “ as it shall be paid,” that is to say, as it shall be realized upon the investments of the estate. We see nothing in this of which the executor can rightfully complain.

The date from which interest is to be computed, April 10th, 1884, is complained of as being arbitrarily fixed by the surrogate. The complaint seems well founded. The case shows no reason, that we have discovered, for adopting that date. As the will does not specify a date from which the annual interest should be computed, the law fixes the day of the death of the testator, for that purpose. The decree of the surrogate recites that he died on the 18th of December, 1876. The referee, in his opinion, speaks of the 8th of that month as the day of his death, but that is evidently a mistake, as the will is dated the 9th of the same month. The respondent’s counsel says in his brief, that the 10th of April was adopted by the surrogate, at the suggestion of the appellant’s counsel, but of that there is no evidence in the record.

The decree may be modified by substituting the “ 18th of December, 1883,” in lieu of “ April 10th, 1884,” wherever the latter occurs, and making a corresponding change in the amount of interest specified in the decree, (unless both parties stipulate in writing, within ten days, that the decree may stand as it is,) and as modified or agreed on by such stipulation, affirmed, with the taxable costs and disbursements of this appeal, to the respondent, to be paid out of the principal of the estate ; and thereafter, the amount of principal, on which the respondent is entitled to be paid annual interest, according to the terms of the will, is the sum of $8,277.26, less the amount of sucb costs and disbursements, and tbe decree may be further modified accordingly.

Baukee,, Haight and Bradley, JJ., concur.

So ordered.


author: Bradley, J.

text:
    Thomas Moore, Resp’t, v. Henry A. Taylor and Joseph Stone, Applt’s. Same Resp’t, v. Same Applt’s.
    (No. 1.)
    (No. 2.)

      (Supreme Court, General Term, Fifth Department,

      Filed October, 1886.)
    1. Contbact — Breach — Abandonment—Damages—Prospective Profits.
    Where parties entered into a contract by which the contractor agreed to do certain work in connection with the construction of a railroad at certain agreed prices, and part of the agreement was that payments were to be made by the railroad company on account of the work as often as every two weeks, and on or before August 1st, for the work done up to July 25th. And the contractor entered upon the performance of tbe contract, and continued the w’ork until August 1st, when he ceased, and abandoned the work uncompleted, because of the railroad’s refusal to pay the installment then due or any part thereof, except on condition that the contractor agreed to pay out the money so paid him under the direction of the company, which condition he would hot agree to. Held, that the contractor was justified by the breach on the part of the railroad company in abandoning the further performance of the contract, and entitled to recover for the work done ; but the breach not being such as to deny to him the right and power to go forward, he could not recover as damages the value of his contract (i. e. prospective profits).
    2. Same — Right to becoveb instadlment and continue work.
    Such a default is not in legal effect a denial of the right to proceed in the performance of the contract to perform services to completion by the other party, or as creating a liability to recovery of prospective profits by way of damages as the consequence. The failure to pay gave an immediate remedy by action to recover the stipulated amount, and is not inconsistent with the right to go forward with the work.
    3. Same — What must appear to entitle to prospective profits.
    It must appear that one party is prevented by the act of the other from realizing the benefit which the contract furnishes, before the former is entitled to recover the value (prospective profits) of the stipulation or covenant he has taken of him who defeats such rights. The pecuniary condition and responsibility of the parties have no bearing on the question.
    4. Same — Abatement — When money paid can be allowed — Circuity of action.
    The contractor having sublet a portion of the work to M. & S., a large number of M, & S.’s workmen and others being unpaid (by reason of the railroad company’s default), gave notice to the railroad company of their claim for labor done, and filed liens against the company for materials furnished and used in the work of construction under the contract. The company, with the assent of the sub contractors, M. & S., paid these claims, which were against M. & S., and took assignments of them. The purpose of the company in taking the assignments was only as a means of making more effectual their purpose to apply the money so advanced upon the amount which they by their contract had agreed to pay the contractor, and not with any view to create a liability of any other party to them for the amount so paid. Held, that the amount of these payments so made by the company properly, should be, and can be, allowed to the company by way of abatement of the contractor’s recovery. And that the parties should not be put to a circuity of action, which would result in no advantage to any party, and would in practical effect finally accomplish the application of the amount in the same way.

      Appeal from judgments entered upon reports of referee.
    On June 7th, 1882, the parties entered into an agreement by which the plaintiff agreed to do the work of graduation, bridging, masonry, tracklaying, track surfacing, and distribution of ties on the Rochester and Ontario Belt Railway, commencing at station (0.) on the bluff of the Genesee River, thence on pleasure line to about station 67, at junction with the permanent line at station 380, thence along it to about station 616 at the shore of Lake Ontario, and in addition three sidings, aggregating about 2600 feet of track, switches and frogs, and a branch of about 4000 feet. The surfacing and track laying in all about seven miles. The clearing and grubbing estimated about five acres. Earth assumed to amount to 81000 yards, rock 1000 yards, bridging 30,000 feet, board measure, masonry 200 cubic yards. The prices: — Earth, per cubic yard, 25 cents cash, five cents in bonds, and five cents in stock; rock, per cubic yard, $1.20 in cash,five cents in bonds, and five cents in stock; trestle-bridging per M. feet, board measure, 150 in cash, $2 in bonds, and §2 in stock; dry masonry per cubic yard, $2.50 cash, fifty cents in bonds, and fifty cents in stock; track-laying per mile, $250 cash, $10 in bonds, and $10 in stock; track and sidings surfacing, $400 cash, $20 in bonds, and $20 in stock. Switches and frogs laid, each couple, $100 cash, $5 in bonds, and $5 in stock; clearing and grubbing per acre, $40 cash, $3 in bonds, and $3 in stock. (The bonds and stock to be taken at 75 per cent, of their parvalue.) Any extra work outside the agreement to be paid for monthly in cash, with 10 per cent, added for superintendence, use of men and tools. But notwithstanding these estimates and rates the “ bulk price ”to be paid to the plaintiff for the work is $28,500 cash, $4,500 in bonds, and $4,500 in stock, at 75 per cent, of their par value, equalling $6000 of each at par value. Payments to be made on account of the work as often as every two weeks, and payment of cash and bonds on, or before August 1st, 1882, for the total work done up to July 25th. And final payment in cash, bonds and stock found to be due, within five days after completion of the work. In the event that the defendants should fail to continue the work,'and should notify the plaintiff to suspend operations, the latter should be paid certain specified rates for the work done up to that time. And in addition as liquidated damages $1000, if he shall not then have excavated as much as 20,000 yards of material, and $500 if he shall then have excavated more than 20,000 yards. And if it shall be determined to construct only the railroad “from the junction, at station 380, from main line, and to abandon the pleasure line construction from station O. to station 67, the total payments shall be reduced by $4000 cash, $1000 bonds at par, and $1000 stock at par, making the total payments under the contract aggregate $24,500 cash, $5000 bonds at par, and $5000 stock at par.”
    Tbe plaintiff entered upon tbe performance of tbe contract, and continued tbe work until about the first day of August, 1882, when be substantially ceased and shortly thereafter abandoned tbe work uncompleted.
    Tbe action No. 1 was commenced August 4th, 1882, to recover for work done up to July 25th, 1882. And tbe plaintiff recovered $12,854, and interest, making together $14,897.78.
    Action No. 2 was brought August 17th, 1882. And tbe recovery was $15,988.87, and interest $2,512.73, making $18,501.-10. This was made up, of some work found to have been done after July 25th, and damages for breach on the part of the defendants of the contract; the larger part of the amount of the recovery was for such damages.
    The referee found that up to July 25th, 1882, the work done and materials furnished under the contract were 43,000 yards earth excavation ; 142 yards rock excavation, 1-10 mile track laid; 8 acres cleared and grubbed; 30 yards dry masonry;
    25,300 feet timber; extra work, . . . $2,727 27
    And 10 per cent, added . . . . . 272 73
    Making altogether at the contract prices, . . $17,854 00
    And deducting payment made, July 10, 1882 . . 5,000 00
    Leaves balance of which with interest from Aug.
    5th, 1882,.$2,043 78
    Makes . $14,897 78
    For which he directed judgment in action No. 1: That the whole amount of work done, and materials furnished by the plaintiff, under the contract, were 46,704yards of earth excavation, 1-20 mile of track, surfacing and extra work, $3,947.60, and in other respects the amount of work was not increased any after the 25th July. Thus producing subsequent to that date, 46,704
    43,000
    -3,704 yards
    earth excavation; 1-20 mile of surfacing and extra work, $3,947.60
    2 727.27
    -$1,220.33, to which add 10 per cent. $122,03.
    The referee also finds that after the first day of August, 1882, the plaintiff demanded of the defendants the payment of the money and'bonds due him on the contract, and' they “ refused to pay the same or any part thereof except the sum of $6,000, which the defendants offered to pay to plaintiff on condition that plaintiff would sign a receipt therefor, embodying a condition that said $6,000-should be paid out under the direction of the defendants to the laborers for work they had done on said road, as shown by said pay rolls, which plaintiff refused to sign, and defendants refused to pay.”
    That the apportional payments provided for in the contract “ were intended by the parties to put the plaintiff in funds to pay Ms laborers and expenses of doing said work, and therefore became a very essential part of the contract.” That on or about the 12th day of August, 1882, the plaintiff abandoned the construction of the railroad, and the further work necessary to complete it, “ for the reason that the defendants refused to perform their part of said contract, in refusing to pay the said cash and bonds due on the first day of August, 1882, for work done up to July 25, 1882, . . . thus depriving him of the means to pay off his laborers and procure their continuance at work.” And as matter of law, the referee determined that the refusal of the defendants to make such payments was a violation and breach of the contract, “which absolved the plaintiff from further continuing the work under the contract,” and that the plaintiff “ has the right to recover whatever damages he has sustained by reason of defendants’ breach of said contract in the particulars stated.”
    The referee finds that the expense of completing the work as the plaintiff left it, was $8,000, and proceeds to make the statement that the full price to be paid, is cash, . . $28,500 00
    In bonds, $4,500, in stock, $4,500, . . . 9,000 00
    Extra work, with 10 per cent, added, . . . 4,842 37
    Making.$41,842 37
    And deducting amount recovered in action
    No. 1,.$12,854 00
    The payment made July 10,1882, . . 5,000 00
    The cost of completion of the work, . . 8,000 00
    -25,854 00
    Leaving a balance of.$15,988 37
    And concludes that the plaintiff is entitled to recover in tion No. 2, that sum with interest added, making $18,501.10.
    The defendants excepted to the several conclusions of fact and law of the referee, and appeal.

      McNaughton & Olmsted., Atty’s, and Frank R. Lawrence, of counsel, for appl’ts; J. & D. Van Voorhis, for resp’ts.
   Bradley, J.

There was some controversy on the trial in respect to the quantity of work performed under the contract.

The accuracy of the estimates presented by the evidence of the respective parties, was the subject of fair criticism. Those furnished on the part of the plaintiff were made without measurements, and those on the part of the defendants were estimates aided by partial measurements only. Thus was presented an apparent conflict in the evidence. No actual measurements or estimates were made by the defendants, or their engineers, or those of the railway company, prior to August 1st, of the work done up to July 25. And there is some evidence, tending to prove that then, and thereafter, there were difficulties in the way of making accurate measurements or estimates of the work done, occasioned by various causes for which the plaintiff was not responsible, and that the measurements made on the part of the defendants and estimates founded upon them were not necessarily accurate; that the plaintiff himself and another engaged'in the work were civil engineers, and that they made estimates with knowledge and observation of the work as it progressed. The estimates so made by them were sufficient in extent to cover the amount of work found by the referee. The evidence as a whole in this respect presented a question of fact. And we cannot say, in the light which he was permitted to view the evidence as it was adduced, that his finding is so against the weight of evidence as to justify the disturbance of his finding. We think his conclusion as to the quantity of work done was permitted by the evidence.

There is not a very clearly defined division of the work into that done before and that done after the 25th of July, 1882, but there is some evidence on the subject which enabled the referee to make the severance, and to support his conclusion in that respect. The defendants allege the abandonment by the plaintiff of the work which he undertook to perform under the contract, and that a large number of persons gave notice to the railway company of their claims for labor done, and filed liens against the company for materials furnished and used in the work of construction under the contract in question; that the defendants paid such claims, amounting to $6,940.10, and took assignments. They sought to charge the amount so paid against the plaintiff as counter-claims. The referee did not allow to the defendants the sums so paid, but found that the plaintiff sub-let the work of construction except the trestle-bridge, and the pile bridge work, to Moore and Sullivan, who entered upon the performance of the work; that in the latter part of July the laborers on the work became clamorous for their pay, and insubordinately refusing to work unless paid, and that they did quit on or before July 29th; that Moore and Sullivan with plaintiff’s assent on that day requested the defendants to pay the men or to furnish the money for that purpose, and proposed to give the defendants security that the money should be paid to the laborers in case they furnished it, which the defendants refused to do, after which the plaintiff made the demand that payment should be made to him; that on July 29th, and during several following days, the defendants procured a large number of the laborers to make and file their claims for unpaid services against tbe railroad company amounting in all to about $6,940.10 under cb. 669 of Laws of 1871, and after tbe notices of sucb claim were handed to the person on whom the service was intended the claims were assigned to the defendants by the laborers, and the defendants paid to them respectively the amounts of their claims ; that none of these claims have been enforced, and no attempt made to collect them by action against the company, but that the defendants still hold them assignees; that these claims are or purport, to be against Moore and Sullivan, and not the plaintiff. And the referee determined that these alleged counter-claims were not demands against the plaintiff, that as against the railroad they ceased to be enforceable before the answer in this action was served, that the defendant’s hold them as assignees simply against Moore and Sullivan, and that the condition on which the defendants offered to pay the $6,000 to the plaintiff was one they had no right to require. There was no specific contract between the railroad company and the defendants produced or proved upon the trial, but it appeared incidentally in various ways that they were contractors with the company for the construction of the road, and it was evidently assumed upon the trial that they had such relation to it. Their priority by contract was with the plaintiff only, and assuming that the latter had by contract sub-let a portion of the work to Moore and Sullivan, they were accountable directly to the plaintiff only for the performance of their contract, and they were primarily liable for the labor and materials obtained by and furnished to them by their request.

But the work being done pursuant to a contract originally made with the railroad company, it and its property could be charged on default of the contractors, or sub-contractors, to p>ay the laborers, etc. Laws of 1850, ch. 140, § 12, as amended by Laws of 1871, ch. 669, § 2; Laws 1872, ch. 895; Laws 1870, ch. 529. And in the event the company should be required to pay such claims, it might require reimbursement from the party with whom it had contracted to do the work out of which they arose. As a consequence the party taking such contract would have an interest in seeing to it that such claims were paid by his immediate, or any subsequent contractor. And the obligation is implied, if not expressed, that each suceeding contractor will protect the party from whom he takes such relation by contract to perform the work or any part of it embraced in the original contract with the company, against such claims and liabilities by him incurred.

The defendants seemed to have been apprehensive that the money might not-be applied in payment of the claims of the character before mentioned, and therefore required assurance that it should be so appropriated. The plaintiff was unwilling to give a receipt for the money• containing sucha condition. And the $6,000, which, the defendants were then ready to pay, was withheld from the plaintiff, and they (defendants) proceeded to pay the laborers. In aid of this, Moore and Sullivan furnished to the defendants’ agent the pay-roll, and'Sullivan advised such agent that he had sent word to their time-keeper to meet him at a place named, so that payment could be made to the men, and such was the place where the men were paid.

And the referee has found that Moore and Sullivan, with plaintiff’s assent, requested the defendants to pay the men or to furnish the money for such purpose.

By making such payment with the assent of the plaintiff and Moore and Sullivan, the liability to them to that extent of the plaintiff would be discharged, and the payment would be deemed made by the defendants for the plaintiff. And in that view there might be no difficulty in charging the latter with the amonnt if the defendants had not taken assignments of the claims for which they advanced the money to pay. By reason of taking such assignments it is contended that Moore and Sullivan remain liable to the defendants upon the claims, and therefore they cannot be asserted in this action against the plain iff. Treating the primary liability as that of Moore and Sullivan, only, to the men, that is so, unless the peculiar situation and relation of the parties and the right of the claimants to charge the company, and that of the latter to seek reimbursement from the defendants, may be considered and given effect to afford the relief sought by them here. The proceeding attending the act of payment, of having notices served upon the engineer of the company under the statute, and taking assignments, was evidently taken as a matter of precaution, so that the payments might be deemed as made to discharge the company and its property from a liability to pay, and thus protect themselves from liability to it. And while the apparent effect of the assignments was to vest in the defendants the title to the claim as against the parties primarily and personally liable to pay, the purpose evidently was to take such title only as a means of making more effectual their purpose to apply the money so advanced upon the amount of compensation which they, by their contract, had agreed to pay the plaintiff for the work of construction of the railroad, and not with any view to create a liability of any other party to them for the .amount so paid. They in this way have done and probably did do more than was necessary to put themselves in a position to charge the plaintiff with the payment so made, although the question of voluntary payment otherwise may have been raised. Senear v. Woods, 74 N. Y., 615. The question presented here is not without some difficulty, but we think these payments should and may be allowed to the defendants in this action No. 1. Proceedings were taken to charge the company, and it is not important what the inducement was to cause it, if it was legally done. This afforded to the defendants the right to step in and protect themselves by relieving the company. If they had not done this the right oi the company would arise to pay and seek relief from the defendants, and they in turn to charge the plaintiff, and if Moore and Sullivan, as Ms sub-contractors, were first liable to pay, he could require allowance by or reimbursement from them. This circuity of action could result in no advantage to any party, and would in practical effeet finally accomplish the application of the amount involved upon, and in payment to that extent of the contracted compensation for the work. By charging-this against the plaintiff he is relieved from so much of Ms liability to Moore and Sullivan for their work. The taking the assignments of an excessive act, was deemed a precautionary one to protect the defendants in making the payments, and in view of the circumstances, cannot well be treated as an obstacle to the application of the amount of them in reduction of the re-recovery for the work done on account of wMch the money was advanced. The fact (if so) that because no action was commenced against the company to recover the claims, the right to do so was barred before the defendants answered in this action is not important. The payment was made to relieve the company when the right to charge it existed, and after the prelimmary steps had been taken which might result in that effect.

The defendants had no right to maintain any action against the company on account of such claims. As between it and them the primary liability was with the defendants, and as to the company,' the workmen were deemed paid by tMs act of the defendants in any view that could be taken of the assignments. TMs action is brought upon the contract between the plaintiff and defendants to recover for tMs work, and as between them it was deemed done by the plaintiff in performance of such contract. It was on account of tMs work that such payments were made. And they were made with the consent of Moore and Sullivan, who were M some manner acting through or under the plamtiff in the performance of the contract between the latter and the defendants. We think the amount of these payments so made by the defendants, properly should, and can be, allowed to the defendants by way of abatement of the plaintiff’s recovery. The evidence about fares, etc., of the men, said to have been paid by Moore and Sullivan, is somewhat indefinite. NotMng appeared on the pay-rolls in that respect.

They say they informed the defendants’ agent that deduction should be made on that account from the moneys earned by the laborers, which he denies. Moore and Sullivan knowrng that the defendants were proceedmg to pay the men, and consenting to it, gave no information to enable them to make such deduction or to attempt to do it. And it does not appear that any arrangement bad been made witb tbe men by which they had become chargeable with any amount paid for their fares, etc. And Charles K. Moore adds, to the effect that they intended to deduct it out of the last payment, that if they did it before, then it would have created some disturbance; and that he did not then know that this was to be the last pay-roll. There is no finding on this subject, and in view of the evidence we are unable to determine that the defendants were required to make the deduction at the time of payment, or that they paid the men more than they were required to pay to discharge their claims for the work they had done. The correctness in the amount of the claims so paid is not questioned. It is contended on the part of the defendants that the plaintiff without cause abandoned the work before full performance of his contract. And that such fact should go in defense of Action No. 1, as the provision of the contract for intermediate payments, must be deemed conditional and dependent upon its complete performance. It is true that the agreement to pay in installments from time to time as the work progressed, rates of prices for it founded upon estimates, was so far conditional that the payments should not •exceed in amount the bulk price to be paid for the entire work, yet inside of that the plaintiff had the right to recover the installments provided for on performance to the time and extent required by the contract, to enable him to demand payment of them subject only to the right of the defendants to allege and •establish by way of abatement such damages as they may have sustained by any subsequent breach of the contract on his part, which is the extent of the defense that could be made founded upon such alleged abandonment. Sickles v. Pattison, 14 Wendell, 257; Snook v. Fries, 19 Barb., 813; Tipton v. Feitner, 20 N. Y., 423. No facts are found and none necessarily established by the evidence which require the consideration in Action No. 1, of the question of the alleged abandonment by the plaintiff •or any further question in that action.

But in action No. 2, such abandonment, its cause and effect have some importance. The referee finds, and it is assumed here that the defendants refused to pay to the plaintiff on the first day of August, 1882, the sum he was then entitled to demand :and receive for work done up to July 25th, and that on or about the 12th day of August the plaintiff abandoned the work for the reason that the defendants refused to pay the amount due on the first of that month. The important question arising upon this state of facts is, whether the plaintiff in consequence of this breach of the contract was entitled to recover by way of damages prospective profits, or such profits as would result to him from a complete performance of the contract. The referee found that by this refusal to pay the plaintiff, he was deprived of •“ the means to pay off his laborers and procure their continuanee at work.” And as eonelnsion of law adds tbat snob refusal was a violation and breach of the contract on the part of the defendants, which absolved the plaintiff from further performance ; that he had the right to abandon the work and recover whatever damages he had sustained by reason of such breach. And then proceeds to award him as such damages the difference between the contract price and the estimated cost of the unperformed work of the contract. This was the correct rule for the measurement of damages if the plaintiff was by the defendants prevented from proceeding to complete performance, unless there was something in the contract to defeat the application of that rule. Masterton v. The Mayor, 7 Hill, 61. It is contended by the defendant’s counsel that the right reserved to the defendants by the provision of the contract to the effect that in the event they should for any reason fail to continue the work, and should notify the plaintiff to suspend or cease operations, a measurement should be made of, and payment made for, the work done at specified rates, operated to defeat the right of the plaintiff to recover damages or to claim anything otherwise than is provided for as compensation by the contract. That provision evidently had reference to a suspension or discontinuance of the work by the defendants for some cause which might arise. They had no purpose to discontinue the work of construction. They urged the plaintiff to proceed, and on his refusal to do so they caused the work by other means to go on to completion. The situation did not come within the provision last referred to of the contract. Danolds v. The State, 89 N. Y., 36-43. The provision that in case it should be determined “to abandon the pleasure line construction from Station O. to Station 67 . . . the total payments shall be reduced by $4,000 cash, $1,000 bonds at par, and $1,000 stock at par, making the total payments under the contract aggregate $24,500 cash, $5,000 bonds at par, and $5,000 stock at par,” was made effectual by abandonment of the construction of that branch of the line of road as appears by the uncontradicted evidence of the plaintiff, which should, as against him, be treated as controlling the disposition of that question. If this fact had been observed and adopted by the referee, his estimation of the damages would have been $5,500 less than the amount awarded by him to the plaintiff. It appears that the case contains all the evidence which in this court presents the question of fact upon the evidence, although no request was made to find and no finding made by the referee in that respect.

The more serious inquiry remains, and is, whether in any view which may be taken of the evideuce, the plaintiff was permitted to recover as damages the prospective profits which the completion of performance by him of his contract would have given him. The right- to such relief does not arise out of every breach of a contract for tbe performance of services, but is dependent upon that which operates as a denial of the right to proceed to completion of the work contracted for. Mere default in payment of an installment when it becomes due is not a denial of the right of the contractor to continue in the performance of the service. And although it may he a breach which would permit him to abandon the work and recover for that already done, it would not enable him to recover the damages which the law would give for refusal to let him proceed in performance of the contract. There was no obstruction put in the way of such performance, other than the effect of the refusal to pay the installment due the first of August. The referee has found that the provision for payment as the work progressed “ was a very essential condition bearing directly upon the performance of the contract by the plaintiff.” And that Moore and Sullivan were “ unable to go on with the same in consequence solely of defendant’s refusal to pay the moneys due according to their contract.” There being nothing in the contract declaring the effect of failure to make any such payment, the question is one of the legal consequence of such default. Our attention is called to no case, yet, holding that a breach of a stipulation to pay can be treated in legal effect as a denial of the right to proceed in the .performance of a contract to perform services to completion by the other party, or as creating liability to recovery of prospective profits by way of damages as the consequence. The failure to pay gives an immediate remedy by action to recover the stipulated amount, and this is not inconsistent with the right to continue to go forward with the work.

The cause which permits the recovery of such damages rests upon a rule of law, having some degree of certainty, and is founded in the fact that the one party is prevented by the act of the other from realizing the benefit which the contract furnishes. And he is therefore entitled to recover the value of the stipulation or covenant he has taken of hint who defeats such right. Such value is the amount of profits to result from performance. An agreement to make payment is generally an essential one, and the consequences of default in payment, may, in fact, be more or less prejudicial according to circumstances, but in legal contemplation they are the same. The pecuniary condition and responsibility of the parties have no bearing upon this question. The rights at law flowing from or produced by a breach of contract, .arise at once from it, and will support an action. If default in payment alone would afford a remedy as for exclusion from further performance the right of action and of recovery of the entire value of the contract would immediately follow failure to pay, although it arose from mere temporary want of readiness to make payment.

In this case the legal right of the plaintiff to proceed in the performance of the contract was not affected by the default of the defendants. But it is said that the defendants sought to and did embarrass the plaintiff by inciting the laborers to insist upon payment fortnightly, when otherwise they would have been content to take their pay monthly.

There is no finding on that subject in this action No. 2, to that effect. And in view of the evidence there is no occasion here for considering that question as bearing upon the proposition now under consideration. The men became insubordinate and quit work, because they did not receive their pay as promptly as they desired, and this was probably occasioned by the default of the defendants, and may be attributable to a breach by them in that respect of the contract, and as one of its consequences, as it is likely that the plaintiff was not, nor were Moore and Sullivan, prepared to pay them without receiving the funds from the defendants, but the latter early offered to furnish the money for that purpose upon the condition that it should be used to pay the men. We do not regard this as important upon the question here in its legal aspect.

The views taken of this case lead to the conclusion that the plaintiff was justified by the breach on the part of the defendant in abandoning the further performance of the contract and entitled to recover for the work done; but the breach not being such as to deny to him the right and power to go forward with the work and perform, he could not recover as damages the value of his contract or (what may be understood to mean the same thing) prospective profits.

There is nothing in the terms of the contract characterizing the consequence of default in payment of an installment other than such as may be implied by law. In view of the finding by the referee of the quantity of work done under the contract, it amounted to.$22,76 48

The recovery in Action No. 1, $12,824, and payment, $5,000 . 17,854 00

The balance unpaid is.$4,907 43

This result is reached by giving to the plaintiff the benefit of the payments provided by the contract to be made on the final estimate of the work, when completed, in stock, for which the breach of the contract as found by the referee permits the allowance, to the extent of the work performed. Pinney v. Gleason, 5 Wendell, 393. This computation makes the amount awarded by the referee as damages, $11,080.94.

If these views are correct the judgment in action No. 1, should be reversed and a new trial granted. Costs to abide the event, unless the plaintiff stipulate to deduct from the amount of the recovery, $6,940.10, and interest thereon from August 5th, 1882, and in that event the judgment so modified, and as modified, affirmed without costs of this appeal to either party.

And in Action No. 2, the judgment should be reversed and a new trial granted, costs to abide the event unless the plaintiff stipulate to deduct from the amount of the recovery, $11,080.94, and interest thereon from August 17th, 1882. And in that case the judgment be so modified, and as modified, affirmed without costs of this appeal to either party.

Smith, P. J., Barker and Haight, J. J., concur.


text:
    Mary E. Miller v. C. Gaylord Wood and Milton Lincoln.

      (Supreme Court, General Term, Fifth Department,

      Filed October, 1886.)
    1. Statute op limitation's — Time for bringing action for damages on ACCOUNT OF FRAUD LIMITED TO • SIX YEARS — CODE ClV. PRO., §§ 382, 3343.
    The complaint alleges that plaintiff suffered damage in consequence of certain false and fraudulent representations made by the defendant L. at the instigation of the defendant YV., whereby plaintiff was induced to purchase of W., at its face value, a mortgage purporting to be a security for the payment of $800, which was in fact worthless. The alleged fraud was practised and the purchase made in May or June, 1878, and the action commenced September, 1885. The relief demanded in the complaint is a money judgment for the amount of damages alleged to have resulted from the alleged fraud.

      Held, that an action for damages is within the six years limitation, unless excepted therefrom, and that an action to recover damages for fraud and deceit is brought within the six years limitation by Code Civ. Pro., § 382, which makes that limitation apply to an action to recover damages for an injury to property and Code Civ. Pro., § 3343, subd. 10, defining an injury to property to be “ an actionable act, whereby the estate of another is lessened other than a personal injury, or the breach of a contract.”
    2. Same — Code Civ. Pro., § 382, subd. 5 not applicable.

      Held, that Code Civ. Pro., § 3S2, subd. 5 did not apply to this case, that the provisions thereof did not extend the time within which to bring an action for damages resulting from fraud.
    3. Same — Information regarding fraud limits the time for bringing THE ACTION TO SIX YEARS.

      Held, that as the complaint alleged information that the mortgage was not a good security more than six years before the commencement of the action, it was. barred on that account.
    Motioh by plaintiff for new trial on exceptions taken at the Cayuga circuit and ordered to be beard at the general term in the first instance

      C. S. Kent, for plaintiff; J. H. Camp, for defendants.
   Smith, P. J.

The action is brought to recover damages alleged to have been sustained by the plaintiff in consequence of certain false and fraudulent representations made by the defendant Lincoln at the instigation of the defendant Wood, whereby the plaintiff was induced to purchase of Wood, at its face value, a mortgage purporting to be a security for the payment of eight hundred dollars, which was in fact worth less.

The only question is, whether the action is barred by the statute of limitations. The alleged fraud was practiced and the purchase made, in May or June, 1878. The action was commenced on the 28d of September, 1885. The only relief demanded in the complaint is a money judgment for the amount of damages alleged to have resulted from the alleged fraud.

As an action for damages, it is within the six years limitation and is consequently barred, unless it is excepted by the statute from that limitation. The six years limitation applies to an action to recover damages for an injury to property, (Code C. P. § 382, subd. 3,) and “ an injury to property ” is defined by the Code to be “ an actionable act, whereby the estate of another is lessened, other than a personal injury, or the breach of a contract.” (§ 3343. subd. 10.) By this circumlocutory process, the Code brings an action to recover damages for fraud and deceit, within the six years limitation.

The plaintiff’s counsel contends that the evidence shows that the defendants fraudulently concealed from the knowledge of the plaintiff the fact that their representations were false and the mortgage was worthless, until a few months before the suit was commenced, and that for that reason the statute does not apply.

In support of that contention, the counsel is understood to rely upon the fifth subdivision of section 382 of the Code. That subdivision provides that in an action to procure a judgment, other than for a sum of money, on the ground of fraud, in a case which, on the thirty-first day of December, 1846, was cognizable by the court of chancery, the cause of action is not deemed to have accrued, until the discovery, by the plaintiff, or the person under whom he claims, of the facts constituting the fraud. That provision' has no application to a case, in which, as here, the only relief sought is a money judgment, by way of compensation for damages. It is intended to apply to cases in which the relief sought is, wholly or in part, such as was formerly within the peculiar province of the court of chancery. The Revised Statutes provided that bills in equity for relief, on the ground of fraud, should be filed within six years after the discovery by the aggrieved party, of the facts constituting such fraud, and not after that time. (2 R. S., 301. § 51.) That statute was held to give six years after the discovery of the fraud, on a bill filed, even in cases where there was a concurrent remedy at law. Mayne v. Griswold, 3 Sandf. S. C. R., 463; Bertine v. Varian, 1 Edw. Ch. R., 343.) The original code provided that in an action for relief, on the ground of fraud, the cause of action is not to be deemed to have accrued, until the discovery of the fraud. (L. 1848. p. 512, § 71. subd. 6.) But by an amendment, in 1849, the provision was limited to cases which prior to the code were solely cognizable by the court of chancery. (L. 1849, p. 635, § 91, subd. 6.) The provision as thus amended was held not to apply to cases formerly cognizable in chancery, in which there was a concurrent remedy at law. Foot v. Farrington, 41 N. Y., 164. To avoid the harshness of that rule, the fifth subdivision of section 382 of the present code was adopted. (See Throop’s note, to same.) That subdivision has been held to include all cases formerly cognizable by the court of chancery, whether its jurisdiction therein was exclusive or concurrent with that of courts of law, in which any remedy or relief is sought for aside from or in addition to a mere money judgment, and which a court of law could not give, although as part of the relief sought a money judgment is also demanded. Carr v. Thompson, 87 N. Y., 160. But, as has been said, when the only relief asked for is a money judgment for damages, the provision does not apply.

Furthermore, the complaint alleges that in August, 1878, “ and at divers times between that date and January first, 1885, this plaintiff was informed that said mortgage was not a good mortgage security for its face value, and that it was a second mortgage.” As the facts of which the plaintiff was thus informed constituted substantially the subject of the alleged misrepresentations and concealment, the nonsuit may be sustained on the ground that the fraud was disclosed to the plaintiff more than six years before the suit was commenced.

We think the motion for a new trial should be denied and judgment ordered for the defendants on the, nonsuit.

Barker, Haight and Bradley, JJ., concur.

So ordered.


text:
    Morrison W. Evans, Resp’t, v. Clara S. Burton and Asa R. Burton, Appl’ts, impl’d with H. Augustus Smith.

      (Supreme Court, General Term, Fifth Department,

      Filed October, 1886.)
    1. Equity actions — Pleadings in.
    Tlie plaintiff is a judgment creditor of the defendant A. R. B. By his complaint he alleges the return of an execution unsatisfied, and that at a date stated such’defendant had title to certain real property which he conveyed to defendant H. A. S., who conveyed to the defendant C. S. B., then and yet the wife of A. B. B., that these conveyances were without consideration, made pursuant to an arrangement between them, and for the purpose consummated by the conveyance; that it was so made to her as security for the payment of a sum owed her by her husband for money loaned him from her separate estate. And further, that at the time of the conveyance A. B. B. was insolvent, and that thereafter the defendant • C. S. B. paid some of his debts; that the deeds were made and received for the purpose of securing the repayment to her of said sum and for no other purpose with the intent to defraud the creditors of A. B. B., and the defendants claim G. S. B. has title to the land. The complaint demanded that the deed be declared a mortgage to secure the payment of the sum loaned by C. S. B., and that she be required to account for the rents and profits, and that the plaintiff have leave to redeem, and for such other and further or different relief as maybe just and equitable. On a motion to strike out certain portions of the complaint as irrelevant, and because causes of action were improperly united, and to make the complaint more definite and certain, it was held, That the nature of actions for equitable relief does not permit the application of so well defined rules of statement of causes for relief as may he required in actions at law as such, hence in the former a greater latitude in the statement of facts has necessarily been allowed. The allegation of intention to defraud creditors is subordinate to the allegation of the purpose of the making of the deed, and not inconsistent with it. The fact of the insolvency of A. R. B., and the fraudulent purpose of the transaction were properly alleged as bearing upon the subject of costs.
    2 Complaint — Belief not demanded in — Code Civ. Peo. , § 1207.
    The statute which permits relief not within the demand of the complaint in case an answer is interposed, limits the relief to that consistent with the case made by the complaint.
    Appeal from order of Erie special term denying motion to make the complaint more definite and certain, or to strike out certain portions of it.
    The plaintiff is a judgment creditor of tbe defendant Asa R. Burton. By his complaint be alleges the return of execution unsatisfied, that such defendant, on 11th August, 1880, had title to certain real property, which he then conveyed to defendant Smith, who conveyed it to the defendant Clara S. Burton, then, and yet, the wife of Asa R.; that these conveyances were without consideration, made pursuant to arrangement between them, and for the purpose consummated by the conveyance to her; that it was so made to her as security in fact, for the payment of $2,500, which the husband owed her for money loaned to him from her separate estate.
    And it further alleged that he was insolvent at the time of the conveyance ; that the defendant Clara S. thereafter paid some of his debts, that the deeds were made and received “for the purpose of securing to her the repayment of the said sum of $2,500, so due and owing to her from the said defendant Asa R. Burton . . and for no other purpose with the intent to hinder delay and defraud the creditors of said Asa R. Burton . . out of the payment of their debts.” and that the
    appellants now claim that Clara S. has title to the land. This part of the complaint the defendants moved to be stricken out. The relief demanded by the complaint is, that the deed be declared a mortgage to secure the payment of $2,500 ; that the defendant Clara S. be required to account for rents and profits ; that the plaintiff have leave to redeem ; and that the plaintiff have “such other further or different-relief ” as may be just and requitable, etc.—

      Wm. C. Green, for appl’ts ; E. C. Hart for resp’t.
   Bradley, J.

The defendant’s motion is founded upon the contention, that the complaint contains the elements of two distinct causes of action mingled together, and while it alleges that the deed to the wife was made through the defendant Smith to secure the payment to her of the amount of $2,500, which the husband owed her, it also alleges that it was made and taken with intent to hinder, delay, and defraud his creditors ; and in support of that allegation it is charged that he was insolvent at the time the deed was made, and that she now claims to be- seized in fee of the premises. And it is insisted that unless these allegations of fraud are to serve some substantial purpose so as to‘ enable the plaintiff to seek relief at the trial on the ground of fraud, they are immaterial and should be stricken out, and that if they can be used for such purpose then they constitute a distinct cause of action, and are improperly united with the cause of action founded upon the fact that the deed to the wife was intended as a mortgage and is such in fact: and that the complaint should in that view be made more definite and certain. It may be observed that this is an action for equitable relief, and that the nature of such cases does not permit the application of so well-defined- rules of statement of causes for relief as may be required in actions at law as such. Hence, in the former a greater liberality or latitude in statement of facts and circumstances has necessarily been allowed than in the latter. And a complaint may not be deemed multifarious, and matter irrelevant so as to render a motion to strike out effectual, although it embrace facts collateral to the apparent cause for relief unless they are foreign to the cause of action. Hawley v. Wolverton, 5 Paige, 522 — Town of Essex v. N. Y. & C. R. R. Co. 8 Hun, 361. The main ground of relief is based upon the charge in the complaint that the deed was made and taken as security, and that therefore it is in legal effect a mere mortgage. And there do not seem to be any allegations in the complaint inconsistent with such alleged fact. The allegation of intent to hinder, delay and defraud the creditors is so connected with that of its purpose as between the parties to secure the debt due from the husband to the wife as to make the alleged fraud subordinate to and consistent with such alleged purpose of the deed of conveyance. And the effect of these allegations taken together is, that notwithstanding the deed was made and taken as such security, it was nevertheless done in that manner with the intent to defraud the creditors of the grantor Burton. And the subsequent assertion of title in the defendant Clara S. Burton by virtue of the deed was made with the like intent, and to consummate such result.

The facts of his pecuniary condition, and the fraudulent purpose of the transaction were not improperly alleged as bearing upon the question of costs, if for no other reason — Howard v. Tiffany, 3 Sandf, 695.

The statute which permits relief not within the demand of the complaint in case an answer is interposed, limits the relief to that consistent with the case made by the complaint. Code Civ. Pro., § 1207 — Stevens v. Mayor, etc., 84 N. Y., 296.

And in this respect there is not much, if any, departure from the earlier practice in this State in equity cases, Colton v. Ross, 2 Paige 396; Beach v. Beach., 11 id 161; Brady v. M ’ Cosker, 1 N. Y. 214; Mayor v. Griswold, 8 Sandf, 464. The view here is that the defendant’s motion was properly disposed of at special term.

The order should be affirmed with ten dollars costs and disbursements of the appeal.

Smith, P.J, and Barker and Haight, JJ., concur.