Summary
In Booth Bros. v. Baird (83 App. Div. 495) the question was not one of pleading, but arose on appeal from the judgment after a trial.
Summary of this case from Fisher Textile Co. v. PerkinsOpinion
May Term, 1903.
Augustus Van Wyck, for the appellants.
George F. Harriman, for the respondents.
The first question presented is whether the contract was joint or several, or joint and several on the part of either or both of the parties thereto. In form, manifestly, the contract is joint and joint only on the part of the vendors, and joint and joint only on the part of the purchasers. It appears, however, that the vendors were corporations engaged in business separately, and the purchasers were severally engaged in business as paving contractors, some in both the cities of New York and Brooklyn and some in only one. It is contended that the plaintiffs could not lawfully become partners in supplying paving stone to the defendants and that, consequently, they cannot jointly maintain an action upon the contract, but manifestly the undertaking was joint on the part of the plaintiffs, although in fact as between themselves each was to contribute, as near as practicable, an equal amount of the paving stone. There is nothing in the contract by which the purchaser could maintain an action against either of the plaintiffs separately for a failure to deliver the whole or any part of the paving blocks. There would be no basis for such a recovery. Consequently the contract is necessarily joint on the part of the plaintiffs. It may be that such a contract by the plaintiffs was ultra vires as claimed by the appellants ( People v. North River Sugar Refining Co., 121 N.Y. 582); but the plaintiffs having performed the contract and the defendants having received the benefit thereof, they are estopped from raising this question. ( Woodruff v. Erie Railway Co., 93 N.Y. 609; Whitney Arms Co. v. Barlow, 63 id. 62.)
The appellants also contend that the liability of the purchasers was several and not joint. In support of this contention it has been shown not only that the purchasers had theretofore had no partnership relations, but that thereafter they severally bid upon and obtained contracts for paving in New York and Brooklyn, and that the paving stone, delivered under this contract, was actually delivered to and used by the purchasers upon their respective individual contracts and paid for by them severally, except as to that part of the purchase price which has not been paid. These facts do not necessarily show a controlling practical construction of the contract by the parties. They are consistent with a joint liability on the part of the purchasers and such, we think, is the effect of the contract. It is evident that the purpose and object of the plaintiffs was to maintain a price for paving stone that would net them a reasonable profit. They had theretofore been competitors, but by this contract virtually ceased to be competitors as to all paving work in New York and Brooklyn during the period covered by it. It does not expressly appear, but the inference is plain, that they practically had a monopoly and control of the particular kind of paving blocks to which the contract relates. While it was not expressly covenanted that the companies would not sell similar paving blocks to other contractors in the cities of New York and Brooklyn, that apparently was the object and intention of the parties; and thus the purchasers, in effect, obtained control of the paving to be done in New York and Brooklyn during the time specified with that kind of paving blocks, for it is provided that in addition to using the paving blocks in performance of their own contracts they are at liberty to sell to the cities should the municipal authorities undertake the work of paving without letting contracts therefor. We have not overlooked their testimony that they continued to be competitors in bidding upon paving work in these cities; but that is not controlling. The object of each of them in entering into this contract is plain. It was that each should know that he was to receive the paving blocks required in the performance of his contracts on as favorable terms as the other; and in order to accomplish this result they saw fit to enter into a joint contract. There is evidence indicating a good understanding at least between the purchasers, for it appears that from time to time one would take a contract from the other at the price at which it was let and perform the work and receive the profits. When contractors come to an understanding as to a division of work without competition, they can arrange to let one of their number be the lowest bidder upon a particular contract without exhibiting bids to one another; but whether, as would be evident were it not for the express testimony to which reference has been made, they had an understanding as to the division of the work or as to the contracts concerning who was to be the lowest bidder or not is immaterial. They were all business men of considerable experience. It is not necessary that we should ascertain every reason that actuated them in making this joint contract. It is sufficient that in the contract as made neither obligated himself to take any particular quantity of the paving blocks, or to become solely responsible for those used by him in the performance of his individual contracts. If such had been the intention of the parties they would have known that it was not expressed by this contract. We conclude, therefore, that both in form and effect the undertaking was joint, and only joint, on the part of the purchasers, although as between themselves it was undoubtedly the duty of each to pay for the amount received by him. The action is, therefore, well brought by the plaintiffs, and the purchasers were jointly liable to them for all paving stone delivered under the contract.
Assuming the liability to be joint, the appellants contend that they have been discharged owing to dealings between the plaintiffs and Smith and Kelly, the other joint purchasers under the contract. Upon a former trial of the issues before a referee the plaintiffs recovered. These appellants then appealed and the judgment was reversed as to them on account of an overcharge, the defendants having been charged for the amount of paving stone that would have been used under a particular contract in paving the space occupied by the tracks of a street railroad, which space was not, in fact, repaved. ( Booth Brothers v. Baird, 87 Hun, 452.) That judgment was a lien upon two parcels of real estate owned by the defendant Smith, who died during the pendency of this action. His executors sold and conveyed the premises, and the plaintiffs joined in a quitclaim deed to the purchasers reciting a consideration of one dollar. On the 14th day of July, 1892, while the action was pending, the president of the plaintiff Booth Brothers and Hurricane Isle Granite Company, and the president of the plaintiff New York and Maine Granite Paving Block Company, individually, entered into an undertaking with defendants Smith and Kelly, reciting that they had paid the plaintiffs upon the contract the amount for which they would be liable if the contracts had been saved and the amount for which, in equity and good conscience, they should be held liable, whereby they agreed in substance to hold said Smith and Kelly harmless from any damages by reason of any judgment in this action. The undertaking does not purport to have been executed by authority of the plaintiff corporations, nor is it shown that they authorized its execution. The appellants contend that these facts constitute a compromise of the plaintiffs' claims against Smith and Kelly, or at least as against the former, without reserving their claim against the other joint debtors, and that, therefore, all are discharged. It is provided in section 1942 of the Code of Civil Procedure that the discharge of one joint debtor does not impair the right of action against another unless such an intent "appears affirmatively." Manifestly under this provision the plaintiffs have not by the facts stated lost their cause of action.
The contract being joint, any counterclaim properly established against the plaintiffs inures to the benefit of all defendants. ( Booth v. Cleveland Mill Co., 74 N.Y. 15, 26; Clark v. Patton, 27 Ky. [4 J.J. Mar.] 33.) It is contended that the referee erroneously disallowed a counterclaim interposed by the defendant Hart for $2,592 for the expenses of handling, hauling and storing paving blocks delivered prematurely. The complete answer to this claim lies in the fact that the referee has found upon conflicting evidence that the paving stone was received and accepted without any agreement or understanding for compensation in this regard and the evidence is sufficient to sustain the finding. Another counterclaim which it is claimed was erroneously disallowed was for breaking and fitting paving blocks which it is claimed did not conform in dimensions with the requirements and specifications of the city. Upon this point also the referee has found upon ample evidence that the paving stone was accepted, retained and used without objection and that the purchasers have thereby waived their right to object. Another counterclaim of $1,128 for expenses of storing, hauling and moving and extra work in laying paving stone rejected as not conforming to the specifications as required by the city has been disallowed. There was evidence sufficient to justify a finding that the plaintiffs were not notified of such rejection and called upon to take back or otherwise dispose of the rejected paving stone and that the purchasers themselves removed or acquiesced in the removal of it and used the same upon other contract work.
The plaintiffs have recovered the sum of $8,739.75 and interest thereon from the 6th day of March, 1890, as demurrage on account of the alleged failure of the defendants to provide, within the time specified in the contract, dockage for vessels arriving with cargoes of stone and facilities for removing the cargoes as rapidly as called for by the contract. The contract is silent on the question of demurrage. The plaintiffs were obligated under their shipping bills to pay demurrage upon certain terms and conditions; and it appears that the plaintiffs did pay demurrage in an amount nearly equal to that for which they have been allowed. The cargoes were consigned to the plaintiffs and the purchasers were not parties to the shipping contracts. The liability of the purchasers is to be determined solely by their contract quoted in the statement of facts. The plaintiffs, apparently for their own convenience, commenced shipping the stone into the harbor of New York before the purchasers obtained contracts and without any formal notice or request from the purchasers therefor. The purchasers were notified of the arrival of one or two vessels loaded with stone, but there is no evidence that any demurrage was charged on account of these vessels. There is evidence that the plaintiffs notified the purchasers of the arrival of other vessels; but it does not appear that the purchasers were notified of the arrival of any of the vessels for which demurrage has been allowed. The plaintiffs were aware of the fact that the purchasers had not obtained contracts and were not ready to use the stone. The purchasers, it is true, did not formally refuse to accept the stone on this ground; and they were evidently anxious that the plaintiffs should hold the stone so that they might not be delayed when they should finally obtain contracts. They, however, did not furnish dockage for the boats of the arrival of which they had notice. The plaintiffs contend that this justified them in omitting to give notice of the arrival of the subsequent cargoes upon which demurrage has been charged. We are unable to concur in this view. The action is brought in affirmance of the contract which was never rescinded. The failure of the purchasers upon proper notice to furnish docks and facilities for unloading the cargoes in accordance with their contract, if the purchasers at the time had obtained contracts requiring the use of the stones, might have constituted a breach of the contract which would have justified the plaintiffs in rescinding it and suing for their damages, but this they did not do. Not having elected to rescind the contract, even if they had a right to do so, they cannot justify the charge of demurrage upon vessels subsequently arriving upon the theory that on account of the former breach they were relieved from notifying the purchasers of the arrival of the cargoes and of their readiness to deliver the same. Moreover, the demurrage for which a recovery has been had was liquidated damages. The plaintiffs in order to recover such damages in any event should be held to a strict performance of the conditions of their own contract which was drafted by themselves, upon which the right, if it exists at all, depends. They should show as a condition precedent not only that they notified the purchasers of the arrival of the cargoes of stone in the harbor of New York but also that such cargoes were ready for delivery. This they did not do in any case. In the absence of such notice, or a waiver thereof, the purchasers cannot be held liable for demurrage. It is clear that if the purchasers had not obtained contracts requiring the use of the stone they would not have been required to take and pay for the same. We are also of opinion that they could not be required to accept the stone conditionally or otherwise, until they obtained contracts. They expected to obtain such contracts and the fair effect of the evidence is that the plaintiffs, also expecting that the purchasers would obtain contracts requiring the use of the stone, had the stone shipped here in advance; and, if the purchasers stood upon their strict legal rights, the duty of providing a place for unloading and storing the stone at that time devolved upon the plaintiffs. For the reasons stated we think that the recovery of the demurrage and expenses for storage cannot be sustained.
There is evidence tending to show that the purchasers agreed to become responsible for the item of wharfage for which a recovery has been allowed.
The executrix of the deceased defendant Baird contends that the estate which she represents is not liable to the plaintiffs, inasmuch as it has not been shown that the surviving joint debtors are insolvent. This contention seems to be fully supported by the case of Potts v. Dounce ( 173 N.Y. 335).
It follows, therefore, that the judgment should be reversed as to the appellant Hart and a new trial granted, with costs to appellant to abide the event, unless the respondents shall within ten days stipulate to reduce the judgment by deducting the items allowed for demurrage and storage expenses, together with interest thereon, and, in the event of their so stipulating, the judgment is modified and affirmed as to Hart, without costs, and the judgment is reversed as to the appellant Baird as executrix and a new trial granted, with costs to appellant to abide the event.
PATTERSON, O'BRIEN and McLAUGHLIN, JJ., concurred; VAN BRUNT, P.J., dissented as to reversal of Baird judgment.
Judgment reversed as to appellant Hart and new trial ordered, unless respondents stipulate to reduce judgment as stated in opinion, in which event judgment as so modified affirmed, without costs; judgment reversed as to appellant Baird and new trial ordered, with costs to appellant to abide event.