Studwell v. Terrett — 17 N.Y. Super. Ct. 520

Majority

p. 520

Studwell, Plaintiff and Appellant, v. Terrett, Respondent.

Headnote

One Jane B. Jones, by a written order dated May 26, 1856, and directed to the defendant, requested him to pay to the plaintiff or order defendant’s note at three months for $250, “whenever I (said Jones) haye put on the third tier of beams upon the five brick houses now building by me, * * to apply on the third payment as per contract for building said houses between us, datedMarch 27th, 1856.” By the contract of March 27th, Jones agreed to build and complete for the defendant five buildings, in a manner and by a time specified, and the defendant agreed to advance to Jones a building loan of $3,500 as the houses progressed, as follows, viz.: (1st,) $500 cash when the first tier of beams was on and the walls up all around; (2d,) $500 cash when the second tier of beams was on and the walls up all around ; (3d,) Three other payments, in notes or acceptances of $500 each, not to fell due before the browning of the whole five houses was on and floors laid. The defendant accepted said order of May 26th, 1856, by a writing on its face reading thus: “Accepted May 29th, 1856; Gr. R. Terrett,” and delivered it thus accepted to the plaintiff, who furnished lumber to be used and which was used in said five buildings. They were so far proceeded with that the side walls were raised up to the third tier of beams, and the third tier was put on, but the front walls were never raised higher than the sills to the basement windows. Held,

1. That the defendant was not liable by reason of his said acceptance, to give anote to the plaintiff for $250, until after the buildings had been so far completed in the manner specified in the contract of March 27th; that the first and second payments had become due, and in addition to that the third tier of beams had been put on, in the further prosecution of the work as usual and customary in such cases.

2. The contract of March 27th, 1856, is, by force of the reference made to it in the order of May 26th, 1856, incorporated into the latter in such sense that its provisions are to determine when the payment of $250, by note, is to be made.

3. The order of May 26th, 1856, and its acceptance, do not, together, constitute a contract binding the defendant unconditionally to give his note for $250; to any person who may furnish materials for the buildings, on the security of such, contract, irrespective of the stage reached in the progress of the work of erecting the buildings at the time such a note may be demanded.

(Before Bosworth, Ch. J., and Hoffman and Moncrief, J. J.)

Heard, April 7;

decided, April 30th, 1859.

This is an appeal by Augustus Studwell, (the plaintiff,) from a judgment against him in favor of Gilbert R. Terrett, (the defend

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ant.) entered on the report of Hamilton W. Robinson, Esq., as Referee.

The summons, by the service of which the action was commenced, was served January 13th; the complaint February 12th, and the answer March 12th, 1857.

The defendant is sued upon his written acceptance of an order, which, with the said acceptance, reads thus, viz.:

“Brooklyn, May 26th, 1856.

“ To Gilbert R. Terrett, Esq.:

“ Sir,—Please to pay A. Studwell, Esq*, or order, your note i| at three months, for two hundred and fifty dollars, whenever s| I have put on the third tier of beams upon the five brick houses now building by me on Putnam avenue, eighty feet S* west of Bedford avenue, in this -city, to apply on the third | payment as per contract for building said houses between us, f dated March 27th, 1856, and oblige,

“Yours, &c.,

“ Jane E. Jones.”

By the said “ contract for building said houses, * * dated March 27th, 1856,” said Jane E. Jones (inter alia) covenanted to and with said Gilbert R. Terrett, “to build” on certain lots therein described, “ situate on and fronting on Putnam avenue, five three story brick houses, with high basements,” &c., to be finished in every respect like a certain house on Lafayette avenue designated as a model house; and to complete them on or before the 1st of September, 1856; and Terrett covenanted to furnish said Jones a building loan of $3,500, “ to be advanced as the said houses progress,” as follows: “First payment, when the first tier beams is on, and the walls up all around, five hundred dollars in money; second payment, when the second tier beams is on, and the walls up all around, five hundred dollars in money; three other payments, to be made by advancing notes or acceptances of five hundred dollars each, drawn by the party of the first part, (said Terrett,) not to fall due before'the browning of all the said five houses is on, and floors laid.” The sixth payment, of $1,000, was to be made when the houses were all finished ready for occupancy.

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The plaintiff furnished lumber and materials to said Jones in erecting said buildings, and gave evidence tending to show that he furnished them on the security of the defendant’s acceptance of said order of May 26th, 1856. He also gave evidence of having demanded from the defendant, his note for $250 before this suit was commenced, and claimed that the evidence showed that, at the time such demand was made, the third tier of beams had been put on said five houses, within the meaning of the provision in that behalf contained in the said contract of March 27th, 1856.

The Referee foum^ among other things—

“ That the side-walls to the houses, mentioned in the order, were built up to the third tier of beams, and the third tier of beams was put on before this suit was brought, and before the refusal of the defendant to give the note.

“That before this suit was brought defendant refused to give the note.

“ That the contractor never erected the front walls higher than the sills to the basement windows, and never became entitled to the first or second payment, or advance.

“ That the defendant had made payments on account of the first and second installments.

“ The Referee found, as matter of law, that there was a valid agreement by the defendant to give the note named in said order, upon the condition therein mentioned.

“ That this agreement referred to and adopted the building contract, between defendant and Jane E. Jones, and that whatever of obligation existed on the part of the defendant to give the note, arose out of his obligation to pay or advance money to Mrs. Jones, from time to time, as she progressed with the erection of the buildings, in the manner therein'specified.

“ That this agreement to pay $250, -in a note, when the ‘ third tier of beams was on,’ which was ‘ to apply on the third payment,’ did not become operative, unless all the work which entitled the contractor to the first and second payments was completed.

“That it became a condition precedent to the giving the note,that1 the walls should be erected all around,’ at least to the height of the second tier of beams.

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“ That this condition precedent was not performed, and that by reason thereof no right of action accrued to the plaintiffand that the complaint should be dismissed, with costs.

The plaintiff duly excepted to the following findings of the Referee, as matter of law:

“ 1st. That the agreement, by defendant to give the note, referred to and adopted the building contract, between the defendant and Jane E. Jones, and that whatever of obligation existed on the part of the defendant to give the note, arose out of his obligation to pay or advance money to Mrs. Jones, from time to time, as she progressed with the erection of the buildings in the manner therein specified.

“2d. That this agreement to pay $250, in a note, when the 1 third tier of beams was on,’ which was to apply on the ‘ third payment,’ did not become operative unless all the work, which entitled the contractor to the first and second payments, was completed.

“3d. That the condition precedent to the giving the note, required the erection of the walls 1 all aroundat least to the height of the second tier of beams.

4th. That this condition precedent was not performed, and that, by reason thereof, no right of action accrued to the plaintiff, and that the complaint should be dismissed with costs.”

The Referee wrote an opinion containing the reasons for his decision.

Judgment having been entered upon the report, the plaintiff appealed from it to the General Term.

George W. Mead, for appellant.

I. The questions for review in this case will be seen, mainly in the findings of the Referee, and the exceptions thereto.

Our difference with the Referee is, mainly, upon his conclusions of law, contained in our exceptions.

This difference will best be made to appear, in the first instance, by a statement of the conclusions of law, that, we think, are inevitable, from the facts found.

1st. We say, that the written order and acceptance, the execution of which is admitted, in themselves, constitute a valid promise and agreement in writing, with the consideration expressed,

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by the deféndant Terrett to and with the plaintiff Studwell, to pay to the latter the note mentioned in the order, upon the condition therein mentioned. That this instrument contains an independent, original agreement, between plaintiff and defendant, to which the statute of frauds has no application.

2d. We say, that if the statute of frauds had any application to it, it fully meets the requirement of the statute.

3d. We say, in the third place, that, if this instrument did not, alone, constitute an agreement by defendant, to give the note to plaintiff; still the only proper conclusion of law, from the facts found, as to the agreement to give the note, was that for the consideration contained on the face of the order, and in consideration of the delivery by plaintiff, to Jane E. Jones, of the lumber, the defendant agreed, to and with the plaintiff, to pay to him the note, whenever Jane E. Jones had put on the third tier of beams upon the houses. That here was an independent, original contract between them, unaffected by the statute of frauds, having no other limitation or condition than the one named in the order.

4th. That the only condition precedent to the giving of the note, was that named in the' acceptance, to wit: putting on the third tier of beams, upon the houses named; and this having been done, and the defendant having refused to give the note, the plaintiff was entitled to judgment for the amount of it in money, with interest and costs.

II. 1st, Therefore, we say that the Referee was right in finding, as conclusion of law, that “ there was a valid agreement by the defendant to give the note named in said order, upon the condition therein named,” but that he was wrong in finding “that,” (by a proper construction of this order, of course,) this agreement referred to and adopted the building contract, between defendant and Jane E. Jones, and that whatever of obligation existed on the part of the defendant to give the note, arose out of his obligation to pay or advance money to Mrs. Jones, from time to time, as she progressed with the erection of the buildings, in the manner therein specified. That this agreement to pay $250, in a note, when the “ third tier of beams was on,” which was “ to apply on the third payment,” did not become operative unless all the work which entitled the contractor to the first and second payments, was completed.

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That it became the condition precedent to the giving the note, that “ the walls should be erected all around,” at least to the height of the second tier of beams.

That this condition precedent was not performed, and that by reason thereof no right of action accrued to the plaintiff.

2d. The theory upon which the Referee tried this case may be thus stated, to wit: That the statute of frauds was an insuperable barrier to the establishment of any agreement, except by considering it as “ a mere alteration of the mode in which a subsisting debt or obligation to pay or advance money was to be discharged,” so as to bring the case within the principle of the authorities cited by him.

• It being competent (as he says) for the parties to agree, that upon a valid consideration, passing from the plaintiff to Mrs. Jones, any moneys, which, by virtue of any subsisting contract, were to become payable to her from the defendant, should be paid to the plaintiff instead.

Sd. The findings of law excepted to are plainly consequent upon this theory.

4th. We are confident the Court will regard the theory and the findings of law referred to, as wholly erroneous.

The judgment should be reversed.

Joseph Neilson, for respondent.

I. The order was conditional, its payment depending upon the performance of the contract by Jones. Jones did not perform, but abandoned the contract.

II. No error of law was committed by the Referee, and the judgment should be affirmed. (See opinion of the Referee; also the case of Van Wagner v. Terrett, 27 Barb. S. C. R., 181.)

Whether the judgment appealed from be erroneous, depends upon the true construction of the contract made by the defendant, (dated May 29th, 1856.)

It is not an agreement to pay to the plaintiff $250 in money on any day named, or which can be ascertained by the contract itself; but it is an agreement to make and deliver to the plaintiff the defendant’s promissory note for $250, “ at three months.”

When and on what contingency it was to be so made and delivered, are the material questions.

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If the words, “ to apply on the third payment,” were transposed and inserted after the figures 1856, the agreement would express clearly the idea, which, as the defendant contends, it is apparent from a careful consideration of its terms, when viewed in the light of the facts then existing and known to all the parties, the parties to it meant to- express. • With that transposition made, it would read thus:

“Brooklyn, May 26th, 1856.

“ To Gilbert R. Terret, Esq.:

“ Yours, &c.,

“Jane E. Jones.”

If, by the terms of the contract of March 27, 1856, Jones might be entitled to any payment whenever she had put on the third tier of beams, “to be made by the advancing notes or acceptances of five hundred dollars each,” none could be required to be given, which would fall due “ before the browning of all the said five houses are on, and floors laid.”

A note made when the third tier of beams was on, and dated at that date, and payable three months thereafter, might fall' due sooner than the time fixed for the maturity of the notes, to be advanced for the third, fourth and fifth payments.

“ To apply on the third payment, as per contract,” &c., is an expression difficult to be understood, if the words “ as per contract,” &c., are to be deemed to have been introduced, merely to show the manner of applying the $250 on the third payment.

But if the words “ as per contract,” &c., be regarded as introduced to render somewhat definite the time at which, and the contingency on which, the note was to be given to the plaintiff, that expression is more intelligible. Eor, although the putting on the third tier of beams is not specified as a stage in the process of erection, or even named in terms, yet it would be quite

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clear that it could not happen, within the meaning of the contract, until after the first and second tier of beams were on, “ and the walls up all around.” All that must be done to make the first two payments demandable. And all that having been done, and the work having been subsequently carried forward, in the usual mode of building, it might be within the parties’ meaning of the contract, that when such further progress had been made as to have contributed $500 further security, a note of $500 was to be advanced, which would mature not sooner than the time specified for the maturity of the notes to be given for the third, fourth and fifth payments.

We think it a just conclusion, therefore, that the contract between the plaintiff and the defendant, by its fair and reasonable construction, does not import or express any undertaking by the defendant to give his note for $250 to the plaintiff, until after the buildings had been so far completed, in the manner specified in the contract, that the first and second payments had become due, and, in addition to that, the third tier of beams had been put on in the further prosecution of the work, in the manner usual and accustomed in such cases.

The plaintiff, so far as the question of securing the defendant's responsibility was concerned, took the risk of Jones, so prosecuting the work as to put on the first and second tier of beams with “ the walls up all around,” and of progressing so much further, as is usual and customary in such cases, as to put on the third tier of beams, and the defendant took the risk, when all that was done, of finding in Jones’ contract, and in what, in that event, would have been done under it, security for and indemnity against such an advance.

This view of the contract would make it substantially such a contract as formed the subject of the action in Van Wagner v. Terrett. (27 Barb. S. C. R., 181.)

We think this view accords with the intention of these parties, as shown by the terms of their contract, when viewed in the light of the facts existing and known to them when it was made. And that, inasmuch as Jones never so far completed her contract .that the first and second payments to be made by the defendant under it became due, it follows that Jones has “ not nut on the third tier of beams upon the five brick houses,” spe

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cified in her contract of ihe 27th of* March, 1856, within the meaning of that contract, nor within the meaning of the contract between the plaintiff and defendant, on which this action is brought.

This view of the rights of these parties, disposes of every question raised by the present appeal, and the judgment appealed from must be affirmed, with costs.

Judgment affirmed.