Macey Co. v. City of New York — 144 A.D. 408

Majority

p. 408

The Macey Company, Appellant, v. The City of New York, Respondent.

First Department,

May 5, 1911.

Headnote

Contract — provision for liquidated damages — facts not constituting waiver.

Where a contract for the erection of certain structures required complete performance by the plaintiff within a certain number of consecutive working days and provided that the plaintiff should pay ten dollars

p. 409

as liquidated damages for each day completion should be delayed beyond that period by his act or omission,' the agreement is not for a penalty, but for liquidated damages, and the party for whom the structures were erected may deduct such damages from the contract price where the contractor through his own fault failed in timely performance.

No waiver of timely performance can be predicated upon the fact that the party for whom the structures were erected permitted the work to be continued after the time for completion had expired, where the contract expressly provided that such liquidated damages would be deducted from the sums due the contractor, that the acceptance of any part of the work should not be deemed a waiver of the right to enforce the provisions of the contract, and the agreement to pay expressly excepted such sums as might be lawfully retained under the contract.

Appeal by the plaintiff, The Macey Company, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of New York on the 12th day of December, 1910, upon the dismissal of the- complaint by direction of the court at the close of plaintiff’s case on a trial at the New York Trial Term.

Burt D. Whedon, for the appellant.

Terence Farley, for the respondent.

The plaintiff entered into a written contract with the defendant to furnish and erect certain cases for exhibits in the Brooklyn Institute of Arts and Sciences, for which the defendant agreed to pay the sum of $7,245. The contract provided that it should be completely performed by the plaintiff within 120 consecutive working days, and for every day that .the completion should be delayéd beyond the 120 days, plaintiff should pay $10 as liquidated damages, provided the delay were caused by the plaintiff’s act or omission. Whether or not there were-such a delay the contract provided was to be determined by the commissioner of paries,» whose decision upon that subject was to be binding and conclusive upon the plaintiff. The plaintiff completed the performance long after the time fixed in the contract, and the commissioner of parks determined and certified that there was a delay of 95 days due to the fault of the plaintiff. The city thereupon paid the contract price, less $950

p. 410

—liquidated damages stipulated in the contract—to recover which this action was brought.' The complaint was dismissed at the close of plaintiff’s case and it appeals.

. The provision in the contract as to ten dollars per day for ■ ■ each day’s delay clearly provided for liquidated damages and not'for a penalty,'and the city was authorized- to deduct the amount of such damage from the contract price. The contract expressly provided that “The City shall and may deduct, and retain the amount of such liquidated damages out of the moneys which may be due or become due to the contractor. under this agreement. But neither * * * nor the doing and acceptance of any part of the work called, for by the contract shall be deemed to be a waiver by the Commissioner of the * * * right to enforce the provisions contained in this agreement.. ’* * * The City will pay, and hereby binds itself to pay, to the contractor, in cash, on the «.expiration of thirty days from, the timé of the completion of the work and the acceptance of the same by the Commissioner, the whole of. the moneys accruing to the contractor -under this agreement, excepting such sum or sums of money as may. be lawfully retained under any of the provisions herein contained for that purpose. ” *

The plaintiff concedes it has been paid the contract price less the liquidated damages deducted. Such damages have .been ascertained in the manner provided in the contract. The commissioner of parks has certifiéd that there was a delay of ninety- ■ five days, for which $950 should be deducted,, and this is all that has been deducted. The appellant claims that the time within which the contract was to be performed was waived by the city, inasmuch as it was permitted to continue the work after the time for completion had expired. But the very object of inserting in the contract the provisions to which reference has been made was to obviate any question Upon that subject. The plaintiff agreed to perform its contract within a certain time and, if it did not, it would pay a certain amount of liquidated damages. The contract was deliberately entered into and if it means anything, or if. effect is to be given to it, then I am unable to see any reason why it should not pay the damages agreed upon. Such damages have been ascertained in the

p. 411

manner provided and the certificate of the commissioner of parks is not attacked. .

The contract which was considered in Deeves & Son v. Man hattan Life Ins. Co. ( 195 N. Y. 324 ), the authority chiefly relied upon by the appellant, did not contain provisions similar to the one here under consideration. There, the owner of the building was not authorized to deduct ‘or withhold from the contract price the damages stipulated, and it was held that such damages had tobe pleaded as a counterclaim dr else an independent action maintainéd to recover the same. Here, the city was' expressly authorized to deduct the liquidated damages from the contract price and in clause W of the contract the city only agreed to pay the contract price less “ such sum or sums of money as may be lawfully retained under any of the provisions herein contained for that purpose.”

The judgment is right and should be affirmed, with costs.

Ingraham, P. J., Scott, Miller and Dowling, JJ., concurred.

• Judgment affirmed, with costs. •

Cases cited

Richard Deeves & Son v. Manhattan Life Insurance 195 N. Y. 324 N.Y. 1909-05-11 p. 411