Crouch v. Gutmann — 32 N.Y. St. Rep. 254

Majority

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George W. Crouch and Frank P. Crouch, Resp’ts, v. Max L. Gutmann, App’lt. Mary L. Gutmann, App’lt, v. Frank P. Crouch, Resp’t.

(Supreme Court, General Term, Fifth Department

Filed June 19, 1890.)

Headnote

1. Reference — Findings cannot be objected to as against evidence where referee allowed to inspect premises.

Where the parties stipulate to allow the referee to inspect the premises in dispute, he is at liberty to construe the testimony in the light of the information thus obtained, and an exception to his findings as against or without evidence is not available.

'2. Contract — Effect of settlement with contractor.

The owner of a building settled with the original contractor, deducting for defects and the amount of a sub-contract, and took an assignment of a bond given by the sub-contractor. Held, that having so settled on the basis of=a substantial performance, such settlement must be treated as relating to the whole contract, and that he could not claim otherwise as against the sub-contractor.

Appeal by Max L. Gutmann from judgment in favor of plaintiffs in the first action and in-favor of defendants in the second, entered upon reports of a referee.

S. B. Bentley, for app’Its; Fanning & Williams, for resp’ts.

On the 28th day of September, 1886, John 'Strachen, a mason and contractor of the city of Rochester, entered into a written agreement with Max L. Gutmann, of the same place, to build and finish a four-story brick block and apartment-house in the city of Rochester, in pursuance of drawings, details and general specifications made by James C. Cutler, an architect.

The building was to be completed by the 1st day of April, 1887. • The price, $16,500, to be paid in installments to the amount of eighty per cent as the work progressed, and the balance *>n the proper completion of the work; payments only to be made on the architect’s certificate. All the drawings or specifications are either embodied in or referred to in the agreement On the same day John Wadsworth & Son, contractors, of the village of Brockport, entered into a written contract with John R. Strachen to construct the carpenter work of said building for the sum of $6,000, payments to be made as the money should be received by Strachen from Gutmann on his contract, and on the architect’s certificate. The drawings and specifications of the original contract were referred to as a part of this. The job was to be finished at the same time.

On the same day Frank P. Crouch executed a bond to Strachen for $6,000, the condition of which was that if Wadsworth & Son should in all things perform their contract, the agreement should be void; otherwise in full force.

The plaintiffs in Mo. 1 brought the action to recover a balance alleged to be due of $1,650 on the $6,000 contract, over and above all payments. It is alleged' this claim was assigned to the plaintiffs by the Wadsworths. It is also alleged that on the 27tk

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day of June, 1887, the Wadsworths made and delivered to the plaintiffs an order, of which the following is a copy:

“Rochester, N. Y., June 27, 1887.

" Max L. Gutmann:

“Please pay to G. W. & F. P. Crouch sixteen hundred and fifty ($1,650) dollars, and charge the same to our contract.

(Signed) “ John Wadsworth & Son.”

This was accepted in the following form:

“ August 6, 11:30 A. M.

“ This order is accepted, payable out of any balance which may be due Messrs. Wadsworth & Son when the building is completed, to the extent of such unpaid balance, and no more, and on the architect’s certificate only.

(Signed) “Max L. Gutmann.”

It is alleged that the order or paper as accepted was assigned to the plaintiffs. The defendant denied performance by Strachen and Wadsworth & Son, and asked a dismissal of the complaint. In No. 2, the plaintiff seeks to recover the amount of the bond upon the claim of non-performance by Wadsworth & Son. The complaint alleges an assignment by Strachen to the plaintiff, and further states Wadsworth & Son did not perform, and that thus Strachen was prevented from performing. The answer alleges substantial performance and asks a dismissal of the. complaint. Both cases were referred to the same referee. In No. 1, the referee reported $633.67 for the plaintiffs. In No. 2, the complaint was dismissed. Judgment was entered by the successful party upon each report, and the defendant in No. 1 and plaintiff in No. 2 appealed to this court.

As the rights of all the parties depend upon the same questions, the cases were practically tried as one action, with a stipulation that the testimony in one case so far as applicable should apply to the other.

In No. 1 the referee finds the contracts, and that on the 5th day of August, 1887, Strachen served written notice to make no further payments to Wadsworth & Son. That the Wadsworths commenced work on the building about the 1st of November, 1886, and on the 1st day of February, 1887, stopped work at the instance of the architect, and also on account of inclement weather. At this time the roof was on the building. Work was after that resumed and continued until the 30th day of July, 1887, when it ceased. A strike in April caused a delay of two weeks, and there were some other delays. That Strachen substantially performed the work on his part, and that he was paid, from time to time, $8,500.45, which with the $6,000 contract and the amount allowed for deductions equalled the contract price, $16,500. The referee also finds that the Wadsworths substantially performed their contract, except in certain particulars in which they were guilty of no willful or intentional violation of their contract; that the work not performed by the Wadsworths was of the value of $145.

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He also found that by arrangement the defendant furnished the Wadsworths hardware to the amount of $293; 64; also tile of the value of $140.50, and $14 for iron pipe; also $12 for iron tran- • sum guards. That they performed extra work to the amount of $260. That the walls of the building settled, affecting the carpenter work, for which the Wadsworths were not to blame, it being due to the settling of the walls and shrinkage. That the materials furnished by the Wadsworths were in accordance with the terms of their contract, except in the case of shelving and closets and maple flooring for the halls, part of which was second rate material. That the Wadsworths stopped work on the building in July, 1887, and did nothing further upon it. That at that time there were defects in the bath room, on the hardwood floors, in piecing casings on windows in the rear of the building, in defective handrails of the front stairs, molding in some portions of the building not being planed smooth, and improper painting of the building in the front part. That it would cost to remedy all defects $203, which was deducted from the contract price. That after the Wadsworths stopped work, the defendant had the keys and took possession of the building on the 21st day of September, 1887, and has since occupied the same. That after April 1, 1887, Strachen and the Wadsworths continued work with the knowledge and consent of the defendant and that the architect visited and inspected the same and made various estimates for payments on the contract. That the defendant made payments up to the 22d day of June. That the payments actually made to the Wadsworths were $2,369. That in .addition thereto the defendant accepted an order for $500. That there should be added to the contract price $266 for extra work. That the deductions to which the defendant was entitled were $293.64 for hardware; $148.50 for tiling; $26.00 for iron pipe; $439.29, amount of J. B. Pike’s bill; $148, an omission by consent of defendant; $205, cost of repairing defect not repaired by Pike, amounting to $1,257.33, which added to the amount of payments made, $4,369, leaves a balance due on the contract and extras of $633.67.

That the order of June 27th was given to the plaintiff for lumber which was furnished to the Wadsworths and used in the erection of the building. _ That plaintiffs had requested the architect for a certificate, but he had refused to give one, and that such refusal was unjust and unreasonable. That the plaintiffs or the Wadsworths did not receive notice to complete the job. That Strachen and the architect had a settlement on the 8th day of August, 1887. That on this settlement the $6,000 was deducted from the contract price of $16,500, and also $1,499.55 for damages under the contract, which included $1,300 for lost time. That the assignment to the plaintiffs "was for a valuable consideration.

The findings in No. 2 were substantially the same as those in No. 1, with the additional finding that no consideration was paid to Strachen for the assignment of said bond. It was stipulated that the referee might inspect the building, which he did.

It thus appears that before the 1st day of August, 1887, the defendant paid Strachen $8,500.45, and that afterwards and

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on the 8th day of August a settlement was made with him, the architect taking part, in which he was charged with $1,499.55, as .stipulated damages under his • agreement, which included $1,300 for 130 days delay, from April 1st to August 8th. The $6,000 .agreed to be paid to Wadsworth & Son for carpenter work was also deducted. Some payments before that had been made to the Wadsworths. Action No. 1 was brought to recover the balance ■due under their contract, which had been assigned to the plaintiffs in that action. After the settlement with Strachen he assigned the bond to the plaintiff, who brings action No. 2 to recover against the obligor in that instrument its amount; in other words, •an amicable arrangement was made between the original parties to the contract by which payment in full was made, less $1,499.55. It would seem to have been a part of that arrangement that the ■bond would be assigned to the plaintiff in No. 2. ■

All controversies between the original contractors are elimi"nated from the case, and a consideration of what occurred under, or whether it was performed, is only important as it affects the parties to these actions. It must be assumed that the stipulation that the referee inspect the building was intended to aid him in weighing the evidence before him, as well as secure the information an inspection would impart, in the absence of any limitation as to the uses which the referee might make of a personal examination. In support of his findings, he was not restricted to what he discovered or actually viewed, but he was at liberty to construe the testimony in the light of the information thus obtained.

In West v. Kiersted et al., 15 N. Y. Wk. Dig., 549, it was held that “ where, by consent of parties, the referee inspects the premises in dispute, his report must practically be conclusive on all the facts whil;h carne within his observation; the court cannot tell what he saw.”

To the same effect is Claflin v. Meyer, 75 N. Y., 260 .

The exceptions, therefore, based upon the assumption that certain findings are against or without evidence, are not available.

The substantial question upon which these appeals depend is based upon the referee’s findings. The, learned counsel for the appellant contends that those findings negative the claim of a subtantial performance, and would defeat a recovery in No. 1 and ecure a different result in No. 2.

The case shows that all the parties treated the original contract o far completed that the defects might be paid for by deducting heir cost from the contract price. This was the theory upon hich the parties proceeded in their settlement.' If it should be daimed that the expectation of recovering full damages for nonerformance'from the obligor in the bond was one of the elements vhieh produced the settlement, the natural answer would be that t cannot be assumed on these appeals that the appellant contemlated an injustice to the bondsman as one of the conditions of ettlement between the parties to the original contract Such a ontention by the appellant ought not to aid' him in securing a versai

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The findings of the referee clearly show that the Wadsworths were less in default in performing than Strachen, and that the-omissions on their part should be paid for by deductions, as well as in the case of the original contractor. Aside from this, the plaintiff in No. 2 had no contract with the Wadsworths. The moment he dealt with the original contractor in settling with him on the assumption of a substantial performance, it must be treated as relating to the whole contract. No reason is seen why he should be allowed to sever the part to be performed by the Wadsworths from that to be completed by the original contractor. It would involve an obvious inconsistency on the part of the plaintiff in No. 2, to insist that he could treat the contract as performed to a sufficient extent as to allow the defects to be paid for, and pay the contractor the balance, and that he could take 'a different position with a sub-contractor with whom he had no agreement. The contract, so far as it applies to the plaintiff in No. 2, was entire. It would not be harmonious or logical to insist upon one remedy as to a part of the contract, and an inconsistent one as to the balance.

The conclusions of the referee as a whole seem to have been substantially just and equitable, and the exceptions do not seem to warrant a reversal of either judgment.

Judgments must be affirmed.

Dwight, P. J., and Macomber, J., concur.