Meyer v. Hallock — 25 N.Y. Super. Ct. 284

Majority

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John S. Meyer, plaintiff and respondent, vs. James C. Hallock, defendant and appellant.

Headnote

1. A contract having been shown to have been once executed, the presumption of law, in the absence of any finding that it has been rescinded, is that it is still a subsisting agreement.

2. A claim by one of two contracting parties that a departure from the contract by the other operated to cancel it, when the other denies that such an effect was produced, does not amount to a rescission.

3. A rescission puts an end to the contract, in toto. After a contract has been rescinded a party cannot, of his own motion, proceed under it to finish a portion of the work agreed to be done by Mm, so as to acquire any rights under it.

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4. Upon a contract by one person to build nine houses, for another, the former, upon a refusal by the latter to permit him to build three of the houses, has a right to rescind and put an end to the contract; but if he elects to go on and finish the other six houses, he does not entirely rescind it.

5. If the contractor, in such a case, continues a negotiation with the other party, for several months, while progressing with the work, he does not waive all right to abandon the contract as to the six houses.

6. A party intending to abandon a contract while in fieri must act promptly and decidedly, on the very first discovery of a breach. If he negotiates with the other party, afterwards, and goes on with the work, he waives all right to abandon, for the breach complained of.

7. An alteration of, or departure from, some of the terms of a contract does not per se operate as a rescission of the whole.

8. Where work has been done under a special agreement between the parties which has not been rescinded, the party performing the same, cannot recover therefor, under a quantum meruit in disregard of such agreement.

(Before Moncrtef, Moxell and McCvhk, JJ.)

Heard April 13, 1864;

decided April 30, 1864.

This is an appeal from a judgment entered upon the report of a referee to whom it was referred to hear and determine the issues between the parties in this action.

The action was for work, labor and services done and performed, and materials furnished, in and about the erection of nine buildings situated in 23d street in the city of New York, upon the allegation that the same were reasonably worth the sum of $15,343.91.

The answer, inter alia, sets up that the work, labor and services done and performed, and the materials furnished by said plaintiff were done, performed and furnished under and in fulfillment of a certain written agreement dated 24th April, 1851, and not otherwise.

The plaintiff, in his reply, admits the making of the written contract, “but upon information and belief denies that the work, labor and services done and performed, and the materials and other necessary things furnished and supplied, were done, performed, furnished or supplied under or by virtue of said contract.” He avers that he was always ready and willing to keep and perform the same, but that he was prevented from doing so by the defendant. For further reply he says that the

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defendant abandoned the contract, * * and refused to allow or permit the plaintiff to perform the same ; * * * that the acts and defaults of the defendant amounted to, and were, an abandonment of the said contract, * * * and that the work, labor, services and materials done, performed, furnished and supplied by the plaintiff were reasonably worth the sum claimed in his complaint, and that he was and is entitled to a reasonable compensation therefor, and is not bound by the said contract, the same having as aforesaid been abandoned by said defendant.”

The referee found as matter of fact, among others, the following, viz: 1st. The making of the "said written contract. 2d. That subsequently thereto the defendant refused to permit the plaintiff to do the work specified by said contract, as to three of the houses mentioned therein. 3d. That after such refusal the plaintiff claimed and insisted that such refusal operated as a rescinding of the said contract, but the defendant claimed and insisted that it did not operate so to rescind said contract. 4th. That the plaintiff, after the refusal aforesaid, and without making' any new contract with the defendant, went on and concluded the work agreed to be done by him in the contract in respect to the (other six) houses mentioned ■therein. 5th. That this departure from the original contract was never waived. * * 9th.'That the work of' the plaintiff was in all respects done and performed as was agreed by the said contract.

The referee 'also found as conclusions of law : 1st. That the contract of April 24th, 1851, was abandoned by the parties thereto. 2d. That the plaintiff is entitled to recover the reasonable value of the work and labor done, and materials furnished by him in and about the building of the six houses upon which he was permitted to do the work, &c. agreed to be done in said contract, without reference to the price specified in said contract. 3d. That in estimating the reasonable value of the work, labor and services and materials mentioned in the second above conclusion of law, the price mentioned in the contract cannot be resorted to, or made use of, as measuring

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or in any way controlling the extent of the plaintiff’s recovery, but only as evidence tending to show the reasonable value of such work, labor, services and materials. ® ® ® ® ® ®

Judgment having been rendered in favor of the plaintiff, upon this report, "the defendant appealed.

James C. Carter, for the appellant.

J. J. Marvin, for the respondent.

The contract in question never was rescinded. The referee has not found as matter of fact that it was ; and in the absence of such a finding, a contract having been shown to have been executed, the presumption of law favors its existence as a subsisting agreement. (Fitt v. Cassanet, 4 M. & G. 898.)

Assuming the third finding of fact to be true, and there is an abundance of evidence to support it, there never was a rescission of the contract. Claiming and insisting on the part of the contracting parties, the one that a departure from the contract operated to cancel it, and the other denying that such an effect was produced thereby, is very far from what the law requires. If the plaintiff was right in his view, then he was at liberty to abandon the further prosecution of the work ; if it was rescinded, then the plaintiff could not of his own motion go on and finish a portion of the work ; if a rescission was made, it must have put an end to the contract in toto.

The reply of the plaintiff alleges an abandonment by the defendant; not that there was a rescission of the contract. There never was an abandonment of the contract in respect to the six houses erected by the plaintiff. The referee so finds in his 4th and 6 th findings of fact.

There can be no doubt that upon the defendant refusing to permit the plaintiff to build the nine houses specified in the contract, it was the privilege of the latter to have rescinded and put an end to the contract, but this he did not do; he elected to go on and finish the six houses, and therefore did not

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rescind. It was said in Lawrence v. Dale, (3 John. Ch. 23, aff. sub nom. McNeven v. Livingston, 17 John. 437 ,) “ If the law allows a party to abandon a contract while in fieri, he ought, at least, to act promptly and decidedly on the very first discovery of the breach. If he negotiates with' the party afterwards, and permits the work to go on, he certainly waives all right to abandon.”

The plaintiff continued .negotiation and discussion with the defendant during several months while progressing with the work ; this clearly was á waiver of all right to abandon the contract as to the six houses ; that the referee has found the fact that the departure from the contract in not building the other three houses was never waived, will not aid the plaintiff in his' claim for erecting the six houses.

The referee erred in finding as matter of la,w that the contract was abandoned by the parties thereto ; the facts as found by him will not sustain it; the law is well settled that an alteration of or departure from the terms of a contract does not, per se, operate as a rescission, of the whole.

If the findings of fact are to be taken as establishing that the plaintiff “ went on and concluded the work agreed to be done by him, and that the same was in all respects done and performed as was agreed by said contract as to the six houses, then it is asserted that there was no rescission of the contract as to those six houses ; and following the authority in 7 Wend. 121 , (Koon v. Greenman, approved in McConihe v. The N. Y. and Erie R. R. Co., 20 N. Y. Rep. 495 ,) that “so far as the work was done under the special contract, the prices specified in it are, as a general rule, to be taken on the best evidence of the value of the work,” the second and third conclusions of law were also erroneous. The case referred to in Linningdale v. Livingston, ( 10 John. 36 ,) as admitting that the special agreement was proper evidence to lessen the quantum of the plaintiff’s damages, is to the same effect. It was proven in 10 John. (supra) that the parties said the price of the logs was to be the sum claimed by the plaintiff; the defendant refusing to permit the plaintiff to complete the contract, the

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former elected to rescind it and sued for the price agreed to he paid for the part performance.

The judgment must he reversed, and a new trial ordered, with costs to abide the event. The order of reference will be vacated and discharged, without prejudice, 'however, to either party moving for an order of reference, &c. &c.

A contract can be rescinded only by the consent of all the parties to it. Such consent need ¿not be expressed. If either party without right claims to rescind, the other party need not object, and if he permit it to be rescinded it will be done by mutual consent. (2 Pars, on Gont. 190.) When the defendant refused to permit the plaintiff to complete the remaining three houses mentioned in the contract, and the plaintiff made no objection, I think it was a rescission of the contract by mutual consent. The right of the plaintiff then was to recover the contract price for the work already done, and such damages as he had sustained by th.e refusal of the defendant to have the contract fulfilled. The plaintiff could not go on, against the consent of the defendant, and do more work and claim to recover what it was reasonably worth.

All the cases to which we were referred by the plaintiff’s counsel, hold that after a rescission of a contract a party may recover, upon a quantum meruit, for work already done. The rescission puts an end to the contract, and it cannot be resorted to, to defeat a recovery. It is the same as if no express contract had been made. But none of the cases go so.far as to allow a recovery upon a quantum meruit, for work done after the contract is rescinded.

The case of James v. Cotton, (7 Bing. 266,) in many respects was like the one before us. There the plaintiff requested the defendant not to go on with the other fourteen houses, and he desisted. It was held this was a rescission of the contract by mutual consent, and the plaintiff was allowed to recover the amount advanced, on a count for money lent.

Regarding the contract at an end, at the time the defendant stopped the work, then the plaintiff can recover for work sub

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sequently done, only upon a new contract, express or implied. There is no evidence of any express agreement; nor is there any for which one can reasonably be implied, and I am unable to find in the case any thing to' support a recovery hy the plaintiff.

If, however, any presumption in favor of the plaintiff arises from the partial performance of the contract, sufficient to imply a new agreement; or if the previous relations of the parties can be resorted to for such purpose, then the defendant is equally entitled to a presumption in his favor; and it will be presumed that he intended the plaintiff should go on under the old contract revived by the implied assent of both parties, the one to do the work and the other to pay according to the terms of the old contract.

If there was any implied assent by the defendant, (without which the plaintiff cannot recover,) it must be that he intended to incur no greater liability than he had previously been under, and he should not, in any event, be held further.

I think the referee clearly erred in the measure of damages allowed the plaintiff, and I therefore concur in reversing the judgment, and awarding a new trial, with costs to abide the event.

I also, think the order of reference should be vacated.

McCuw, J. dissented.

Order of reference vacated.

Cases cited

Koon v. Greenman 7 Wend. 121 N.Y. Sup. Ct. p. 288