Conselyea v. Blanchard — 2 N.Y. St. Rep. 738

Majority

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George W. Conselyea, Resp’ts, v. Dudley Blanchard et al., App’lts.

(Court of Appeals,

Filed October 5, 1886.)

Headnote

1. Contract—Violation or—Assignment or moneys under—Subsequent contract—Priority or orders.

A contract made by parties with two counties to build a bridge over a stream separating the counties, contained a provision that in case of unreasonable delay in performance or violation of the conditions by the contractors, the committee of the counties should have the power to complete the work and deduct the expense from moneys due or to become due upon the contract. The contractors having violated the contract the parties, who had furnished part of the materials for the bridge completed the work at the request of the committee, who became liable for payment to them, with the concurrence of the original contractors, and obtained from the original contractors an order on the treasurer of one of the counties for money due for the work. Subsequent to the violation of the original contract and prior to the date of this order, the contractors had made and delivered to other parties orders upon the county treasurer sufficient in form to operate as assignments of any moneys due under the contract. Held, that there being no moneys due the contractors, these prior orders could only operate as assignments of money to become due, and in event of none becoming due, were of no effect; that they did not take precedence of the order held by the parties completing the work.

2. Findings or fact—Appeal.

Where some of the findings of fact are more favorable to the appellants, than others, they have the right, upon appeal, to claim the benefit of those most favorable to them.

Appeal from general term of the supreme court, second-department.

On the eleventh day of December, 1880, the counties of Kings and Queens entered into a contract with the defendants, Swift and Van Aken, to build a swing bridge over Newton creek, which separates those counties. The-contract price was $7,800, one-half of which was to be paid by each county. The turn-table of the bridge was to be tne Blanchard & O’Rourke patent turn-table. The contract, also contained the following provision: “Should, at any time during the progress of the work, the engineer be of the opinion that the work is being unnecessarily or unreasonably delayed, or that the contractor is wilfully violating any of the conditions of this specification, and shall certify so in writing, then the committee shall have the power to. notify the contractor to discontinue all work, or any part thereof, under this contract. And thereupon the said contractor shall discontinue said work, or such part thereof as. the engineer shall designate, and the committee shall thereupon have the power to purchase, by contract or otherwise, as they may deem advisable, such quantity of material, and to employ such labor, and to use such material as-they may find upon the line of such work, and to do any work that may be necessary to fulfill this contract, or such

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part thereof as maybe deemed necessary, and to charge the cost of such labor and material to the contractor, and the expense so charged shall be deducted out of such moneys as may be then due, or at any time thereafter become due, the contractor under this contract.”

Swift & Van Aken entered upon the performance of the contract, and, after they had made some progress therewith, they were paid by the two counties $3,000. After-wards, before the completion of the contract, they gave orders upon the county treasurer of Kings county sufficient in form to operate as equitable assignments, which orders were dated and filed at the times mentioned below: To William Conselyea, for $950, dated October 8, and filed October 10, 1881; to the same, for $600, dated October 11, and filed October 15, 1881; to Drew & Bucki, for $1,000, dated and filed October 20, 1881; to Blanchard & O’Rourke, for $1,250, dated December 28, and filed December 29,1881.

Thereafter the bridge was completed, and accepted by the two counties, and the sum of $4,000 remained due from them for the construction thereof, one-half thereof from each county. The county treasurer of Kings county was willing and ready to pay the $2,000 to the persons entitled thereto.

This action was commenced in Hay, 1882, by William Conselyea, since deceased, and the plaintiff claimed priority of payment out of the sum of $2,000 due from Kings county, for the reason that his orders bore the earliest dates, and were first filed with the county treasurer; and he prayed judgment that the county treasurer be restrained from paying any part of the sum to either of the other defendants, and that he be ordered, first, to pay the sum of $1,550, the amount of his two orders, to him. The defendants, the firms of Blanchard & O’Rourke and Drew & Bucki, both answered, each claiming priority of payment out of the fund in the hands of the county treasurer. The action came to trial at a special term, and the court ordered judgment that Blanchard & O’Rourke be first paid the sum of $250 out of the fund; that the plaintiffs who had been substituted in the place of William Conselyea, deceased, be next paid the sum of $1,550; and that the balance of $2,000 be paid to Drew & Bucki. From the judgment thus ordered Blanchard & O’Rourke and Drew & Bucki appealed to the general term, and, from affirmance there, to this court.

James Troy said. Tennis G. Bergen, for app’lts; J. Stewart Ross, for resp’ts.

The only claim the plaintiffs have to share in the fund in controversy, and to have priority therein, is

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based upon the two orders taken by their testator, for the first of which he paid $850, and for the second of which he paid $595. There was no evidence that the money thus advanced bore any relation to, or had any connection with, the bridge, or its erection, and the plaintiffs claim priority of payment solely on the ground that these orders are prior in date to the other orders.

Blanchard & O’Eourke base their claim to priority of payment upon facts found by the judge at special term, as follows:

They were the owners of a certain patent for the construction of bridge turn-tables, which were known and designated as “ Blanchard & O’Bourke Patent Turn-tables,” and, as such patentees, they had the exclusive right to con-' struct and use such turn-tables; and Swift & Van Aken, by their contract with the two counties, were bound to furnish ■such a turn-table. For the purpose of performing their contract with the counties, Swift & Van Aken entered into contract with Blanchard & O’Eourke to furnish, supply and erect one of these turn-tables for the price of $2,500, $2,000 of which was to be paid when the turn-table should be completed in running order, and accepted as such, and the balance of $500 when the bridge should be accepted by the counties. By the contract of Swift & Van Aken with the counties it was provided that the work on the bridge should be commenced within ten days, and finished within sixty days, after the completion and delivery of the central pier; and, if there was delay beyond that time, they agreed to pay, as liquidated damages to the counties, the sum of fifty dollars per day for every day of such delay, the amount to be retained from the contract-price stipulated to be paid by the counties. By the contract between Swift & Van Aken and Blanchard & O’Eourke it was provided that the turn-table should be completed within the time specified for the completion of the bridge. After the making of the two contracts mentioned, and in or about the month of July, 1881, the central pier for the bridge having been completed and delivered, Swift & Van Aken entered upon the performance of their contract, and in that month, after doing some work thereon, they refused to proceed further under their contract until a payment was made to them which they were not entitled to, as the engineer in charge on behalf of the counties refused to certify therefor. Whereupon the joint committee of the two counties, duly authorized thereto, took entire charge of the supervision of the work, and the engineer ceased to act further; and the committee on the 21st day of July, for the purpose of inducing Swift & Van Aken to proceed with the work, although nothing was actually due them under the contract, I

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reported a resolution to the boards of supervisors of the two counties recommending a payment of $3,000 to them on their contract, which sum was paid on such recommendation by the counties.

On the reporting of such recommendation by the committee, Swift & Van Aken resumed work on the bridge, and on the passage of the resolution to make the payment recommended, they again ceased work. When such sum was paid to them they again resumed work on the bridge, and immediately thereafter again ceased work, and left the bridge unfinished, and thereafter absolutely failed and refused to proceed any further with the work, or to complete their contract. Blanchard & O’Rourke duly proceeded with the erection of the turn-table, and performed their contract in respect thereto so far as the condition of the work to be performed by Swift & Van Aken permitted; but they were unable to fully complete and erect the turn-table, for the reason that Swift & Van Aken had not, when they ceased to work, progressed to an extent sufficient to enable them to complete the same, or further proceed therewith. Although they repeatedly demanded and required Swift & Van Aken to proceed with the erection of the bridge, so as to permit them to proceed with the erection of the turntable, they continually refused so to do, and, in violation of their contract, hindered, delayed and prevented them from finishing the turn-table and completing their contract. Swift & Van Aken were thus in default from July to October, 1881, and Blanchard & O’Rourke were not at any time in default.

In the month of October, while Swift & Van Aken were thus in default, there was a meeting of the joint committee, at which Swift & Van Aken refused further to perform their contract, and declared their inability so to do, and their intention absolutely to abandon the performance thereof. Whereupon Blanchard & O’Rourke notified the committee that they would not proceed with the building of the turntable unless payment of the 'amount which they were to receive therefor should be assumed by the committee, and thus secured to them; and they, being then and there in possession of the work and material already used by them in the building of the turn-table, so far as the same had progressed, declared their intention, unless so secured, to remove the materials, and not to furnish the counties with the turn-table, or to permit the construction or use thereof. Whereupon the committee, having full power and authority so to do, requested them to erect the turn-table, and promised and agreed that on the completion thereof the counties would pay them the sum of $2,500; and then and there, with the consent and concurrence of Swift & Van

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Aken, that sum was reserved, set apart, assigned, and appropriated from the amount still unpaid to Swift & Van Aken, under their contract with the counties, to and for the payment of Blanchard & O’Rourke, on the completion of the turn-table; and the boards of supervisors of the two counties thereafter duly ratified the agreement.

Blanchard & O’Rourke, relying upon the agreement, thereupon agreed to proceed with the work, and did accordingly thereafter finish and complete the same. Swift & Van Aken did not thereafter proceed with the contract with the counties, and no money ever fell due to them thereunder, except as hereinafter stated. Blanchard & O’Rourke, with the consent of Swift & Van Aken, finished the contract of the latter with the counties, and permitted them to have the ultimate benefit thereof, and to receive the amount unpaid on the contract, after first deducting the amount of $2,500, so appropriated, assigned, and set apart for paying for the turn-table. On the twenty-ninth day of December, 1881, the committee, in pursuance of the agreement to pay Blanchard & O’Rourke for the turn-table on the completion thereof, and for the purpose of carrying out the agreement, duly certified to the boards of supervisors that the sum of $5,000 was due to Swift & Van Aken on account of their contract, one-half thereof payable by each county; that $1,250 of the same was to be paid by each county to Blanchard & O’Rourke before any other sum should be paid to any other person; and that the balance, $750, was to be paid by each county to Swift & Van Aken. The boards of supervisors severally adopted resolutions of the same tenor and effect.

On the twenty-eighth day of December, Swift & Van Aken delivered to Blanchard & O’Rourke an order on the treasurer of Kings county, requesting him to pay them the sum of $1,250 out of any moneys due, or to grow due, on their contract, which order was filed with the treasurer on the next day. That order was so given in furtherance of the agreement made between the joint committee and Blanchard & O’Rourke, with the consent and concurrence of Swift <& Van Aken, and it and the bill presented therewith, and the auditing thereof, and other proceedings in relation thereto, were resorted to and had in compliance with the agreement, and were mere matters of form, resorted to and adopted for the purpose of obtaining the money in the usual and most expeditious way, under the agreement, and not otherwise, and were in no way intended to impair the rights of Blanchard & O’Rourke to the money under the agreement.

The trial judge not only found the foregoing facts, but he also found as conclusions of law that there was nothing

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due to Swift & Van Aken from the counties, under their contract with them, at the time they gave any of the orders involved in this action; that the counties and Swift & Van Aken had the legal right, at any time during the existence of the contract between them, to alter, modify or change the same in any way, provided it was done in good faith, and without intent to defraud; that the agreement made between the committee and Blanchard & O’Rourk and Swift & Van Aken was made in good faith, and for the best interest of the counties and .of the other parties thereto, and was in all respects a valid and essentially necessary change and modification of the original contract; that, at the time of making such change and modification of the contract, Swift & Van Aken were in default in performance thereof, and then and there refused to proceed therewith or further to perform the same; that such refusal, and the consent of Swift & Van Aken then given to the agreement between the counties and Blanchard & O’Rourke, were a waiver of the notice required to be given to Swift & Van Aken, under their contract, on their failure to proceed therewith with reasonable diligence; that on such refusal and waiver the committee had the right and power, on behalf of the counties, and under the contract between them and Swift & Van Aken, to proceed with and procure the erection of the turn-table, and charge the expense thereof to Swift & Van Aken, and deduct such expense from the moneys yet unpaid on the contract; that Swift & Van Aken unreasonably hindered, delayed and prevented Blanchard & O’Rourke in the erection and completion of the turn-table, in violation of the contract between them; that Blanchard & O’Rourke did not at any time, or in any way violate the terms of such contract; that, on such violation of the contract by Swift & Van Aken., Blanchard & O’Rourke had the legal right to abandon their contract, and absolutely refuse to proceed further therewith, and also to remove and retain such materials as were still undelivered by them, and were in their possession, or under their control, and refuse to permit the further construction or the use of their patent turn-table; that without such turn-table the bridge could not be built or used, as planned and projected; that Blanchard & O’Rourke had the right to make the agreement above mentioned with the counties, and the agreement was ratified and confirmed, and was in all respects valid and binding on the counties and on Blanchard & O’Rourke and was and is unaffected by the former contract between them and Swift & Van Aken.

If some findings of fact are more favorable to Blanchard & O’Rourke than others, they have the right, upon this

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appeal, to claim the benefit of those which are most favorable to them, and so we have repeatedly held. Schwinger v. Raymond, 83 N. Y., 192 ; Bonnell v. Griswold, 89 id., 122.

It is impossible for us to perceive how, upon the facts found, a conclusion adverse to the claim of Blanchard & O’Rourke can legally or justly bé reached. The orders taken by Oonselyea and by Drew & Bucki did not operate as assignments of any money then due, as none was then due under the contract. They operated as assignments of money which was expected to become due, and which might become due, under the contract. If, after they were given, by the default of Swift & Van Aken, or by force of provisions contained in the contract, no money should become due to Swift & Van Aken, the orders would become inoperative. The fact that the orders were given did not deprive the counties of the right to take any action in good faith under the contract which they deemed proper and necessary to secure its performance, and to protect their interests. The orders did not bind them, except as to payments which might become due to Swift & . Van Aken under the contract.

Before any money was earned or paid under the contract, and before the orders were given, the engineer employed by the counties was discharged, and the joint committee assumed the supervision and direction of the work under the contract, and, by the consent of Swift & Van Aken were substituted in his stead. After Swift & Van Aken had, for some time, been in default in their performance of the contract, they declared their inability to further perform, and absolutely refused further performance. Then the counties had the right to make any arrangements they could for the completion of the bridge, and deduct the expenses to which they should be subjected from the price stipulated in the contract. With the assent of Swift & Van Aken they agreed with Blanchard & O’Rourke that they should complete the bridge, and that, if they would do so, they would pay them the §2,500 which they were to have for the turn-table. At that time Blanchard & O’Rourke were absolved from further performance, and they had the right to remove all their materials, and thus the bridge could not have been completed as planned. Relying upon the promise of the counties, they resumed work, completed the contract of Swift & Van Aken, and their own contract, and gave the counties the benefit of their patent turn-table. The $2/00 never became payable to Swift & Van Aken, but became payable only under the new agreement; and thus the orders given to Oonselyea and to Drew & Bucki. never applied or attached thereto.

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The effect of the agreement was to procure the performance of Swift & Van Aten’s contract, but at an expense to the counties of the $2,500 which they agreed to pay, and were bound to pay, and which they could deduct from the contract price.

It matters not what form the subsequent transactions between the counties and Swift & Van Aken took. The order was given to Blanchard & O’Rourke, and the bill against the counties was made out and audited in the name of Swift & Van Aken; but all this was done to carry out the new agreement which had been made, and without any intent to affect, in any way, the rights of Blanchard & O’Rourke thereunder.

The court below held that Blanchard & O’Rourke were entitled to priority of payment only for the sum they expended in the completion of the contract of Swift & Van Aken after the new "agreement; and, as that sum was-$500, one-half payable by each county, that they could have priority only for $250, on the fund now in question. But this is only a partial view of the case. They had the right to remove all their materials, and to absolutely refuse to construct and put up the turn-table, and in consideration of the new agreement, they left their material, gave the counties the benefit of their turn-table, and expended the $500. For all of this they were entitled to have the $2,500 promised to them. Therefore, we are of opinion that Blanchard & O’Rourke were first entitled to have $1,250 out of the $2,000, held by the treasurer of Kings county.

For the purpose of this appeal we might stop here. But with the view to the new trial, something more may with propriety be said as to the rights of priority, as between the plaintiffs and Drew & Bucki. The latter claim priority of payment over the plaintiffs, because the materials they furnished for which the order was given to them were actually used in the construction of the bridge, while there is no proof that the money paid by Conselyea was in any way used in the construction of the bridge, or had any relation thereto. This claim is not well founded. It is sufficient that plaintiffs’ orders were founded upon a sufficient consideration. That made them effectual as assignments. While the money paid was not actually used upon the bridge, it might have been used to support the assignors, or to-keep off their creditors, or to maintain their credit, while they were engaged in the performance of their contract. It might be a very embarrassing inquiry to trace the connection which money thus advanced could have with the performance of any contract. Its relation to the contract might be very remote, and yet just as useful as if actually

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used in its performance. If courts should enter upon the inquiry to which we are invited by Drew & Bucki, they would have very embarrassing equities to adjust, and great uncertainty would nearly always attend such assignments. Suppose money or materials were advanced or furnished to be used in the performance of a contract, but were not actually thus used, or only so used in part, and orders were taken for the consideration thus furnished sufficient in form to operate as equitable assignments, how, under the rule claimed by Drew & Bucki, could the equities of several assignees be adjusted? We think the wiser rule is to treat all assignments, of the kind we are now considering, founded upon sufficient considerations, as standing upon the same footing; and we find no case which sanctions any •other rule. Drew & Bucki claimed that they obtained an order from Swift & Van Aken in June, 1881, before any of the other orders were given, which was filed with the •county treasurer, and mislaid or lost; and that their present order, dated October 20, 1881, was taken for the same amount, in the place of the former one; and they gave evidence tending to sustain this claim. But there was no finding, or request to find, in reference to the former ■order. If, upon the new trial, they can satisfy the court that such an order was given, and that the last order was given as a substitute for that, then they will be in a position to claim priority over the plaintiffs. It will not be sufficient for Drew & Bucki to prove that, at the time they furnished these materials, Swift & Van Aken promised to pay them out of the money which should become due to them upon the bridge contract. Such a promise does not •operate as an equitable lien thereon. Williams v. Ingersoll, 89 N. Y., 508 , 518.

We are, therefore, of opinion that the judgment should be reversed, and a new trial granted, costs to abide event.

All concur, except Miller, J., absent. .

Footnotes

1 Reversing 35 Hun, 668 , mem.