Brainard v. Kings County — 65 N.Y. St. Rep. 468

Majority

p. 468

Morris E. Brainard et al., Resp’ts, v. Kings County et al., App’lts, et al., Def’ts.

(Supreme Court, General Term, Second Department,

Filed February 11, 1895.)

Headnote

Contract—Construction.

_ Where subcontractors, who are unable to complete their contract, authorize the contractors to take charge of the work and complete the same for their account, without waiver of their rights under the original contract or of any extra work accruing from the same, the contractors, by proceeding with the work, assume only to finish it for the subcontractors, and, on completion, the cost is to be deducted from the contract price before anything will become due to the subcontractors to which a lien will attach.

Appeal by some of the defendants from a .judgment in favor of plaintiff.

Kellogg, Rose & Smith, for app’lts Dean & Westbrook; George F. Elliott, for app’lt county of Kings; F. H. Van Vechten, for app’lt county of Queens; Jas. R. Steers and Cephas Brainerd, Jr. (Horace Secor, Jr., of counsel), for resp’ts.

It seems to be conceded on the part of appellants that the judgments in favor of Drake, Stratton & Co., Limited, and King Bridge Company, should be affirmed; so that the only points to be considered relate (1) to the question of error raised by the two counties as to the amount due the contractors of $50,-000; and (2) whether the lienors, creditors of Cregin & Co., are entitled to judgments.

The first question is of small moment, as it can be readily corrected. Of course, everybody concedes that the liability of the counties is limited by statute to the amount due the contractors (§ 8, c. 629, Laws 1892), which can be easily ascertained, or the counties can be relieved by a stipulation that in no event shall they be called upon for more than is due.

The difficult question is the second, relating to the creditors of Cregin & Co. If they are to succeed, it must be by showing that on or after April 13, 1893, some amount became due Cregin & Co. from Dean & Westbrook for work done pnder their contract. By their refusal or inability to go on under their contract, Dean & Westbrook were put in a position where they must either go on and finish the contract, or forfeit all rights under it. The Cregins voluntarily surrendered up the contract to be performed by Dean & Westbrook, and the latter voluntarily accepted that duty, and proceeded to finish the work described in the contract. After an interview with the engineer for the counties, in which Cregin had

p. 469

stated that he could not go on, and on April 13, 1893, they wrote the following letter to Dean & Westbrook:

“ April 13th, 1893.

“ Messrs. Dean & Westbrook—Dear Sirs : You are hereby authorized to take charge of work we have been doing under our contract to build bridge at Meeker avenue, Brooklyn, and complete the same for our account. We do not waive by this provision our rights under the original contract, or any extra work accruing from same; we to receive ^ of the profits accruing on such extra work.

“ Yours, truly, C. A. .& T. Cregin.”

—And Dean & Westbrook at once proceeded to finish the work. I do not think this amounted to a rescission of the contract between them, leaving the 20 per cent, withheld and the work done since last'pay day due the Cregins; but it, was an arrangement entered into bv which the contract was agreed to be assumed and carried out on account of Oregin & Co., they not waiving any rights under it, and to receive all the profits and one-half of the profits of the extra work. It must be assumed that Dean & West-brook accepted this proposition, and finished the work under it. It seems to me that under this arrangement, supposing that the contract thus assumed by Dean & Westbrook had been completed at a profit, in such case the Cregins would have been entitled on an accounting with Dean & Westbrook to the 20 per cent, that had been withheld, also to be paid for all the work that had been done up to April 10, 1893, the day they quit work, and to one-half the profits on extra work, if any. It seems to me clear that the same rule should apply when a loss occurs in completing the contract.

It was to be done for the Cregins, “ on our account,” to wit, their account. I pay no attention to the claim that no pay was due and payable until the 17th of April under the contract, as some work had been done which would become payable on that day; and in this case we may regard it as ■ equitably due as between the Cregins and Dean & Westbrook, as it would have been allowed on an accounting between them. Dean & Westbrook did not take the contract off the hands of the Cregins, but assumed to finish it at that date on their account.

What were the rights under the original contract that the Cregins did not waive? I assume that they were to receive, when the contract was complete, the full price thereof, including the 20 per cent, withheld as security, and pay for any extra work, but were entitled to nothing unless they performed their contract. The words “our account,” in the letter of April 13th, are the keynote. The proper construction of these words means that the Cregins were to be responsible for the cost of the work, and to receive the pay for it; otherwise the words have no meaning. If this is a proper construction of the arrangement between Oregin & Go. and Dean & Westbrook, then when did anything become due from Dean & Westbrook to them ? The 20 per cent, could not become due until 80 days after completion of the contract, which Oregin & Go. never completed until after the 20 per cent.

p. 470

and the sum due for work by him had all been exhausted in completing the contract; so that at no time did Cregin & Co. have anything due them, from Dean & Westbrook. Can it be said that Dean & Westbrook, under the circumstances, took the risk of finishing" Cregin & Co.’s work under the contract on their own account, and allow Cregin & Co. credit, and pay them, for all the work up to that time, together with the reserve of 20 per cent.? They did not say so, neither did the letter of the Cregins contain any such intimation. This is the theory upon which the judgment is based. The trial judge has found that, at the time the contract was assumed by Dean & Westbrook, there was due Cregin & Co. about $8,000, earned since the last pay day (17th of March), and the 20 per cent, reserve provided for in .the contract; but it must be observed that much labor and materials had been expended on the work before any lien was .filed, and, if it was done on account of Cregin & Co., then that must be deducted in order to ascertain what, if anything, was due Cregin & Co. at the time of filing the separate liens. We are obliged either to hold that, at the time of Dean & Westbrook’s assuming to finish the contract, there was due to Cregin & Co. the said 20 per cent, reserve, and for labor up to April 10, 1893, about $3,000, which has remained unpaid up to the filing of liens, or we must hold that the contract was completed on account of Cregin & Co., and that it is not shown what, if anything, became due to them. It is to be observed that Cregin & Co. were not entitled to anything until the contract was finished. There was not at any time anything due him from the counties defendants here, neither do the evidence or findings specifically show what was due when any lien was filed, except that it is found that the amount for labor since last pay day and the 20 per cent, reserve is found to be due up to the filing of the last lien in July, 1893.

The whole question turns upon the letter andón the words“our account.” If Dean & Westbrook took the contract off the hands of the Cregins at their own risk, intending to allow the Cregins all they had earned up to date, and the 20 per cent, reserve, then this judgment is entirely right. If, on the other hand, they assumed, and that was the contract, to finish the work for account of Cregin & Co., then at no time did they owe Cregin & Co. anything. It seems to me that the latter is the true construction, and that the judgments of the lienors, creditors of Cregin & Co., must be set aside and a new trial granted.

The judgments of Drake, Stratton & Co., Limited, and the King Bridge Company, affirmed. Mew trial as to the other defendants.

All concur