Adams v. . Lawson

Edwabd T. Babtlbtt, J. The plaintiff, as trustee for the benefit of certain creditors, seeks in this action to recover damages for the alleged breach of a building loan agreement. The Appellate Division having unanimously determined that there is evidence supporting or tending to sustain the verdict of the jury, we are precluded from examining any question of fact. A statement of a few of the undisputed facts will render clear the questions of law presented by this appeal. On the *463 6tli of February, 1902, the defendant sold and conveyed to Dawson B. Hilton and Gustave Levy certain vacant lots in the borough of Brooklyn. On even date with this transaction Hilton and Levy entered into a written building contract with the defendant whereby they agreed to erect upon the premises so conveyed to them ten houses, according to certain plans and specifications, and the defendant covenanted to advance from time to time a sum aggregating twenty-five thousand dollars, being twenty-five hundred dollars on each house, under conditions not necessary to state at this time. Hilton and Levy, after proceeding under this contract for a time, became financially embarrassed and assigned their interests in the premises to the plaintiff, Thomas F. Adams, as trustee for the creditors set out in the complaint in this action. The defendant assented' in writing to this transfer, to the plaintiff Adams, subject to certain provisions, and extended the time of completion of the buildings called for in the building loan agreement for the period of ten weeks from July 26th, 1902. On the same day the defendant and the plaintiff entered into a further agreement in writing whereby the plaintiff agreed to take over from Hilton and Levy a deed of the premises conveyed to them by the defendant and an assignment of their interests in the building loan agreement; and the plaintiff also agreed to use his best endeavors to procure the discharge of all mechanics’ liens filed against said buildings and to comply generally with the conditions of the building loan agreement. On the same day the plaintiff entered into an agreement with six of the creditors of Hilton and Levy, wherein they agreed to discharge certain mechanics’ liens and continue under the contract. On the lOtli of October, 1902, the defendant and the plaintiff stipulated that the contract time for carrying out the agreement should be extended to the 24th of October, 1902. The two provisions of the contract having an important bearing upon the exceptions presented by this appeal are the following: The “ Third ” subdivision of the contract reads, in *464 part, as follows: * * or if any materials, fixtures or articles used in the construction of said buildings or appurtenant thereto be not purchased by the .parties of the second part so that the ownership thereof will vest in them on delivery at said buildings, that then or on the happening of either or any of said events, said party of the first part may refuse to advance any sum called for by this agreement beyond those advanced at the time of the happening of such event, etc. * * *” Subdivision 16 First,” paragraph 5tli of the contract reads as follows: “That when the respective stages of completion of said buildings shall.be respectively reached by the said parties of the second part, before they shall be entitled under this agreement to receive the installment before provided to be paid under such respective stage of completion, they shall notify the said party of the first part at least five (5) days beforehand of the fact that they are ready for a payment, and the approval of the said party of the first part first had as to the work done before such payment or payments is,or are made.” As before stated, the time for the performance of this building contract was extended until Friday, the 24th of October, 1902. On the evening of that day the defendant was notified over the telephone by the plaintiff’s attorneys that the last payment under the contract was.due, being the sum of thirty-five hundred dollars. There was a conflict in the evidence as to the nature of this colloquy over the telephone, but with that we have no concern. There is no dispute as to the attorneys for the plaintiff having made this demand. Thereupon the time was set running under the above-quoted clause of the contract, which provided that the contractors • were to notify the defendant “ at least five (5) days beforehand of the fact that they are ready for a payment, and the approval of the said party of the first part first had as to the work done before such payment or payments is or are made.” This provision must be construed as a further extension of the time for five days after the payment is actually due, according *465 to the terms of the contract, in order to enable the defendant to ascertain by deliberate examination whether there has been such a completion of the contract as requires him to make the payment, sought to be collected. It is undisputed that the plaintiff, Adams, was a clerk in the office of his attorneys and that Mr. Hatchings of that firm was practically in control of his interests, as was quite natural under the circumstances. It is also undisputed that mechanics’ liens for a large amount were filed on Saturday morning, the 25th of October, 1902. This action was subsequently commenced to recover, not the final payment due under the contract of $3,500, but for damages in the sum of $9,500 and interest from the 25th of October, 1902. The defendant’s answer, after several admissions as to facts not controverted, was substantially a general denial, the complaint having alleged full performance on the part of the plaintiff. The jury rendered a verdict apparently for the final payment of $3,500 with interest and judgment was entered for that amount, with costs. At an early stage of the trial the. question was sharply presented as to the character of evidence that the defendant was entitled to introduce under his general denial. The complaint in brief was the allegation that the plaintiff had performed the building contract on his part; that the final payment of $3,500 was due on the 24th of October, 1902, and by reason of defendant’s default he was damaged in the further amount of $6,000. The answer denies these allegations; in other words, the defendant asserts that the final payment of $3,500 was not due by the terms of the contract on the 24th of October, 1902, and that he was entitled to sustain that general denial by competent evidence. The question now presented is whether his right in this regard was improperly limited by the trial judge, thereby excluding from the consideration of the jury evidence that might have led them to a different conclusion. In the 'case of Farmers' Loan & Trust Co. v. Siefke (144 N. Y. 354, 358) Chief Judge Andrews said: “ But as *466 the pleading stood the question whether the defendant had executed a sealed instrument was an issuable fact which was asserted upon one side and denied upon the other and which the plaintiff was bound to establish as a part of his case. The defendant under a general denial may adduce evidence to controvert what the plaintiff is bound to prove in tiie first instance (Milbank v. Jones, 141 N. Y. 345, and cases cited), and the general rule is well established that whatever a plaintiff is bound to prove in the first instance as a part of his case he is bound to establish by a preponderance of evidence.” (Wheeler v. Billings, 38 N. Y. 263; Schwarz v. Oppold, 74 N. Y. 307; Griffin v. Long Island R. R. Co., 101 N. Y. 354; Gilman v. Gilman, 111 N. Y. 265, 270.) In Benton v. Hatch (122 N. Y. 322) it was held that under an answer denying the allegations of the complaint in an action of ejectment, the defense of want of title in plaintiff is admissible. The defendant was desirous of proving the non-performance of the contract; that the clause already cited providing in substance that where the materials, fixtures or articles used in construction were not purchased so that the ownership thereof would vest in the contractors on delivery at the buildings, he was entitled to refuse performance on his part. The defendant further desired to show that there had not been full performance of the contract; that materials, fixtures and articles were delivered under conditional contracts of sale prior to the time of performance; also that certain materials, fixtures and articles had been removed from the buildings prior to the 24th of October, 1902, and subsequent thereto during the five days allowed the defendant by contract to ascertain whether the buildings were in such a condition as to warrant him in making the final payment. After some ineffectual efforts the defendant was permitted to make this offer: “We desire to prove that these houses were never finished ; that when we went into possession they were destroyed, the mantels were torn out and the houses were practically taken apart under the instructions of Hr. Hitch *467 ings by written communication to each creditor.” Before ruling upon this question there was a colloquy between the court and counsel for both parties. Mr. Hitchings said: “ What took place subsequent to the 26th of October had absolutely nothing to do with'this action.” It will be observed that the plaintiffs counsel took the position that notwithstanding the defendant had been allowed five days in order to ascertain whether the final payment was in fact and in law due, yet he was practically to be deprived of his rights, although he had the entire day of October 29th in which to decide as to his legal lights. A long discussion followed between court and counsel, in which the plaintiff’s counsel insisted that this proof was not admissible under a general denial. Thereupon the defendant offered to amend by setting up affirmatively such matters as he desired to prove, stating that he cared nothing for a counterclaim as he did not think it collectible. The latter suggestion was apparently made by defendant’s counsel in view of the statement of the trial judge that he could not set up a new cause of action. The offer of proof and the offer to amend, the latter • being wholly unnecessary, were overruled and the defendant duly excepted. If the defendant had been able to prove that these houses were not finished on the 24th of October, or if he could have established the fact that there were materials and fixtures placed therein prior to that day under conditional bills of sale, he was entitled to do so under his general denial. Furthermore, he should have been allowed to prove, if he could, all that happened during the five days succeeding the 24th of October; he was also entitled to prove, if possible, that certain parties had been requested by plaintiff’s counsel, either verbally or by letter, to exercise their supposed right of removal from the buildings of materials or fixtures either before the 24th of October, or during the five days next succeeding; also to have shown, if he could, that mantels and other fixtures and materials were forcibly removed from said buildings during the period aforesaid. One of the plaintiff’s counsel admitted, upon, the stand, *468 that there were conditional bills of sale. He was asked this question: “ Do you know which of these materialmen had conditional bills of sale?” This was objected to, but allowed. The answer was: “ I can give some of them ; I don’t know that I could give them all. Mr. Donovan, his material was in there; the plumbing, ranges, mantels, tiling, gas fixtures ; that is all 1 recollect at the present time.” The witness subsequently stated that he knew these materials under such conditional bills of sale were less than $3,500 in value, the amount of the final payment. As to this question of the amount of property furnished under conditional bills of sale audits value the defendant was entitled to introduce proof, as the witness only dealt in general terms as to the materials and fixtures involved. Donovan, above alluded to, when on the stand, was asked this question : “ After getting the chattel mortgage or the conditional-bill of sale, did you subsequently remove the plumbing work? Objected to as incompetent, immaterial and irrelevant,” and the defendant excepted. The defendant sought to prove by Mr. Hitchings, when on the stand, that lie had knowledge of the removal of furnaces; he was asked whether he had ever written a letter in which he had referred to the removal of these furnaces; or wliethér he had ever written any letter on the subject whatsoever. All of these questions were ruled out as irrelevant and immaterial and exceptions taken. We are- of opinion that the ground covered by this offer and the exceptions to specific questions that were overruled involve subjects concerning which this defendant was entitled, under the general denial, to adduce such proof as he had tending to controvert those facts that plaintiff was bound to prove in order to establish his cause of action. The judgment and order appealed from should be reversed and a new trial granted, with costs to abide the event.