Newell v. Mayor of New York

Patterson, J. The plaintiffs, on December 24, 1888, entered into a contract with the city of New York to regulate, grade, curb, and flag 170th street from 10th to 11th avenues in that city. They bring this suit, alleging two causes of action: First, that the department of public works has wrongfully detained from them a certain amount as inspectors’ fees for 29 days at the rate of $3.50 a day; and second, that, by reason of wrongful acts and interferences on the part of the municipal authorities in suspending the work and preventing its due performance and proper completion within a reasonable time and in a right way, the plaintiffs were compelled to incur great expense in transferring their work from one kind of excavation to another; and that they sustained great loss in other respects, and for which they now attempt to hold the city liable. The original answer is not before us, but at the trial an amendment was allowed and assented to, and the affirmative defenses of payment of all that was due under the contract, and a release under seal, were set up, and the cause was tried on those defenses. The main subject now requiring consideration is the effect of the release. A receipt was given by one of the plaintiffs for the amount due according to the strict terms of the contract, and in giving that receipt he acted for himself, and under the sanction of a power of attorney which he received from his copartner. The learned judge before whom the cause was tried held that the receipt of itself was not an obstacle to a recovery; that it might be explained; and he undoubtedly at one stage of the case recognized the settled rule that, where work is done by a contractor, necessitated by the wrongful acts or omissions, or even mistakes, of the municipal authorities, its cost may be recovered in an action for damages, and that such contractor is not limited simply to the contract price, (Mulholland v. Mayor, etc., 113 N. Y. 631, 20 N. E. Rep. 856;) but when the answer was amended, and the release was put in evidence, he held that such release was an absolute bar to all claims except those for inspectors’ fees; or, in other words, he limited the right of recovery to the first cause of action. The condition of the proof under which the question of the effect of the'release arose is as follows, viz.: Under the ruling as to the receipt the whole case was opened on both counts of the complaint, and some evidence was given to sustain the second cause of action. When the release was put in it was at once attacked by the plaintiff on the ground of fraud, the specification of that fraud being that it was procured from the plaintiff by misrep [912] resentation of the officer of the city to whom and when it was given, on payment being made of the ostensible balance due the contractors under the contract. The only evidence of the alleged misrepresentation was that at the time the paper was given the plaintiff Freligh asked whether or not any deduction had been made for inspectors’ fees, and the answer of the representative of the city was that no such deduction was made. A witness called on behalf of the city, who had the conversation with Freligh, testified that no such conversation occurred; but on his cross-examination it was apparent that he test.fied not from an actual recollection of the particular conversation, but from his general course of doing business in like matters. The learned judge submitted to the jury on this testimony the single question as to whether or not any misrepresentation had been made that would affect the validity of the release on the question of the inspectors’ fees, and he declined the request of the con nsi 1 for the plaintiffs to submit to the jury any other question relating to the liability of the city for anything more than those fees. That a release of the character given in this ease is ordinarily an absolute discharge of the city from liability, and that it must be taken in its widest and most comprehensive sense, and according to its full tenor and effect, was distinctly decided by the court of appeals in the case of Phelan v. Mayor, etc., in 119 N. Y. 86, 23 N. E. Rep. 175. But that case, of course, does not go to the extent —nor, indeed, could it be well assumed on any ground—that such a release cannot be attacked on the claim that it was given by misrepresentation or fraud on the part of the city. The learned judge on the trial assumed that it was open to attack (as it certainly was) so far as the inspectors’ fees were concerned, but, if it were open to attack on that ground, the effect of determining that it was procured by fraud would necessarily be to avoid the whole instrument, and not merely as to the particular subject concerning which the misrepresentation was made. It was left to tlxe jury to say on the whole evidence whether or not any misrepresentation had been made. The necessary effect of that misrepresentation would have been to avoid the whole instrument, and not merely quoad a particular subject. That fraud which will vitiate an instrument absolutely nullifies it, takes it out of the scope of judicial consideration, and leaves the case precisely as if no such instrument had been executed. It was evidently in the mind of the learned judge below that, inasmuch as the only subject then under discussion between Mr. Freligh and the representative of the city was the inspectors’ fees, the effect of the release should only be considered with reference to that one particular topic. But there can be no limitation as to the effect of a void instrument. It is either void or valid, and if it is void it is beyond judicial cognizance as being a factor in the case. The jury found, under the instructions of the judge, that the instrument was void. Their verdict cannot be supported on any other hypothesis; and, that release being void, the case necessarily was relegated to the situation in which it stood as upon a simple receipt given for the amount due, which receipt, of course, as the learned judge held, was open to impeachment. We do not intend to pass upon or intimate in any way an opinion as to the sufficiency of the proof, or the effect of that pi'oof, relating to the second cause of action; but we think it was error, not to submit to the jury the whole case on this release. It was really (by the ruling made) a submission of only one question to the jury, and the other was eliminated from the case; and, as said before, the release was either good or bad. If it were ineffectual■ as to the inspectors’ fees, it was equally so as to the second cause of action. Therefore we think the judgment should be reversed, and a new trial ordered, with costs to abide the event.. All concur.