Ward v. Hudson River Bldg. Co.

5 N.Y.S. 319, 1 Silv. Sup. 341, 24 N.Y. St. Rep. 347, 52 Hun 614, 1889 N.Y. Misc. LEXIS 2963
New York Supreme Court·Decided May 18, 1889·Published·Cited by 1 cases

Opinion

Pratt, J.

This action was commenced in equity to obtain relief from a-so-called “penalty” provided in a contract between the parties, and to recover a sum of money. The first, and perhaps the controlling, element in the case is whether or not the sum against which relief was sought was a penalty or fixed and liquidated damages. The facts are quite complicated. A statement of the material facts is necessary to a proper understanding of the case. The undisputed evidence was that the parties made four agreements in writ-' ing. The first one was made' April 28, 1887, and provided that plaintiff should do and finish certain work on, and furnish materials for, two houses-for defendant, at Hill View, South Yonkers, N. Y., on its plots 9 and 27 on the map, under the direction and to the satisfaction of an architect, according to drawing and specifications,—the work to be wholly finished on or before October 1, 1887; and defendant agreed to pay therefor $10,800, in three installments, as the work progressed, provided the architect certified that the work had been done upon which the installments respectively depended. The second contract was made in June, 1887, and contained like provisions respecting the building of two other houses for defendants at same place, on its plots 17 and 19 on said map, for which defendant was to pay $10,100,—in installments upon the architect’s certificates,—the work to be completed on or before January 1, 1888. Each of these contracts provided that plaintiff should pay the defendants $10 per day for every day’s default after the dates fixed for completion of the work, as and for liquidated damages. It seems that plaintiff was to build two other houses for defendant on plots 11 and 45 on said map. The plaintiff was in default under all these contracts on the 5th of March, 1888, and on that day the parties entered into a further contract in writing. This third contract recites the first two contracts above noted, and refers to the provision for the $10 per day as “a penalty.” It then recites that plaintiff desired an extension of time to complete his work, viz., until Marph 25, 1888, on the four houses to be built under the two contracts, dated, one in April, and the other in June, (on plots 9, 17, 19, and 27,) and until August 1st on those to be built on plots 11 and 45. It also recites that the so-called “penalties for default” on the four houses (plots 9, 17, 19, and 27) would amount to $1,540. There would have been 'due to plaintiff from defendant a payment under the two contracts amounting to $1,210 on the houses on plots 17 and 19. The instrument tlien attests a mutual agreement that “the sum or penalty” which would become due March 25, 1888,—the date of the desired extension on houses,—“shall be $1,540 by way of liquidated damages, unless said four houses and all extra work are then entirely finished in accordance with the plans and specifications under the original contracts,” and that no further payments should be made on the houses on plots 9, 17, 19, and 27 until the same are entirely completed on or before March 25, 1888, and that if they were completed on that day the defendant would wTaive all claim to the $1,540, and plaintiff would waive all claim for certain contemplated extra work; and in that event defendant would then pay the $1,210, etc.

Before proceeding to the fourth agreement it will be well to state the intervening facts. Plaintiff claims that they constitute the ground on which he should be relieved from the so-called “penalties.” His evidence shows-that on Wednesday, March 6th, the houses were completed with the Exception of the cess-pools and cisterns, and that three or four days would have been sufficient time in which to have finished them; that on Sunday night, March 10th, the remarkable snow-storm called “the blizzard” set in, and continued until Wednesday morning, the 18th, to such an extent that it was impossible to work in these cess-pools and cisterns; that it was warm and fair [321]*321on Thursday, the 14th, and rainy on Friday and Saturday, the 15th and 16th; that he put on a force of about 100 men—all that he could get-—on Wednesday, the 13th, to shovel away the snow, only to find the cess-pools and cisterns full of water; that it took them three days to pump them out—until the 20th —so that they were dry enough for the men to work in them, and even then that the bottoms were springy; that the water flowed in upon them to such an extent that the cement would not set until after the 30th of March. His workmen testified that they worked diligently to complete the work, and perhaps that may be assumed after the storm. On the 30th of March the plaintiff’s counsel addressed a note to defendant, in which he claimed that the completion of the work on the 25th had been prevented by the storm as an act of God, and insisted that the work was substantially, though not “ wholly or entirely, ” completed. On the 16th of April the parties made their fourth agreement, which recites their agreement of the 5th of March, and “ that by the terms of said agreement certain penalties were to be paid in case the houses therein mentioned were not finished on or before March 25, 1888; and, in case they were finished, the titles to the plots referred to in said contract were to be passed, and all matters therein referred to were to be adjusted on March 26th. ” It also recites that the houses were not completed on the 26th, and that the architect’s certificate was not presented, and that plaintiff claimed that the penalties should not be exacted by reason of the facts set up in the letter of his counsel under the date of the 30th March, and that the parties were willing to go on and close their contract, “leaving the question of the said penalty for litigation in case said Ward chooses to litigate the same, the suit to be commenced within six months, if at all, and the said parties hereto removing all other questions and property from their controversy, except the one question of penalty, as alleged.” It then attests that the parties closed their matters, reserving the question aforesaid. The defendant gave its deeds, and insisted on the claim to the $1,540. Plaintiff waived all claims except-to the payment of $1,210. Plaintiff then brought his suit asking, first, to be relieved from the penalty, and that he might recover the balance due on his alleged right to the payment. Defendant set up the several agreements, the plaintiff’s defaults, and denied that the storm constituted a defense, whether as an act of God or otherwise. It asked no affirmative relief. The learned trial judge in his opinion treated the reserved sum as a “penalty,” but in his decision granted relief against it mainly on the ground that the completion of the work was prevented by the storm as an act of God, and adjudged that plaintiff was entitled to the balance claimed by him.

The parties have been most persistent in referring to the so-called “penalty” by two utterly inconsistent and irreconcilable names. In both their original contracts they refer to the $10 per day for default as liquidated damages. The expression in each is the same,—“as and for liquidated damages.” This, then, is the starting-point. The $10 per day was not as a penalty. There was a definite and distinct agreement that it was “as and for liquidated damages.” Then, singularly enough, in their third agreement, which provides for the extension, they talk about the accumulation—the $1,540—in their recitals as a penalty. But when they came to the contractual clauses they varied their description of it, referring to it as “the sum or penalty;” thus showing that there may have been some dispute between them with respect to its exact legal character. But they“settled it.

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Ward v. Hudson River Bldg. Co., 5 N.Y.S. 319, 1 Silv. Sup. 341, 24 N.Y. St. Rep. 347, 52 Hun 614, 1889 N.Y. Misc. LEXIS 2963 (N.Y. Super. Ct. 1889).

5 N.Y.S. 319 (Ward v. Hudson River Bldg. Co.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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