Cerero v. American Surety Co.

Finelite, J. This is a motion to set aside the verdic the jury for $500 on the ground that it was agains weight of evidence, contrary to law and contrary to t1 deuce. The action is to recover $1,000 for breac written contract, dated June 5, 1905, between the plaintiff and the defendant Rosoff, whereby the plaintiff granted and conveyed to said defendant certain buildings in the borough of Manhattan, city of Hew York, down to the level of the cellar bottoms of said buildings and the material constitut — 549 — ing the same, and all debris except the old mortar and cement of the buildings which may result from taking down said buildings to be removed from the premises within thirty days from the date thereof. The American Surety Company was made a party defendant by reason of a certain written instrument dated June 2, 1905, and delivered by it and the defendant Rosoff to the plaintiff on the 5th day of June, 1905, whereby said Rosoff, as principal, and said company, as surety, “ are held and firmly bound unto Raphael L. Cerero, of the City of New York, in the sum of one thousand dollars ($1,000),” and further reciting the contract above mentioned and then stating the condition of said obligation, to wit: “ That if the said principal shall faithfully perform said contract on his part in so far as such contract provides for the demolishing and removing of said buildings, then this obligation shall be void; otherwise to remain in full force and effect.” At the trial plaintiff’s evidence was to the effect (testimony of James R. Hay) that the defendant Rosoff failed to remove the debris or any part thereof; that the buildings in question consisted of five adjoining houses of twenty feet frontage each, upon lands extending about 100 feet into the block; that the cellars, which were of uniform depth of ten feet each, were filled very nearly to the street level, and in some places above the street level, with the debris resulting from the taking down of the houses; that the amount of old mortar and cement in this mass was very small; that the estimated cost of freeing the premises from this debris, exclusive of old mortar and cement, would be about $1,200. Another witness of the plaintiff testified that twenty-five per cent, of this mass of debris was other than old mortar and cement, this being his estimate only, based upon a superficial examination, no effort being made by him to accurately determine the exact proportion. In addition to this a large quantity of tin, such as comes from roofs, was on the premises. The frontage of the houses was 100 feet and the depth of the houses into the block was sixty feet. This gave a surface area of 6,000 square feet, and with a depth of ten feet the cubic contents of the mass were 60,000 cubic feet, or 2,222 — 550 — cubic yards, plus a small fraction of a cubic yard. The evidence of the character of the debris and the fact that a quantity of tin was left upon the premises were corroborated. The testimony of the defendant Rosoff was that the reasonable cost of removal of the debris such as came from these buildings was $2 a load of two and one-half cubic yards, making the total cost, based upon the figures given, of $1,776. If twenty-five per cent, of this was required to- be removed the pro rata cost would be $444. The defendants raise the question that the sum sued for was in the nature of liquidated damages, and, therefore, the jury, finding for tire plaintiff upon the issues presented, should have found a verdict for said sum, and that a verdict for a smaller amount cannot be sustained. In considering this question it should be observed that the agreement is by reference made part of the bond, and, therefore, in seeking the extent to which the defendants obligated themselves to the plaintiff and in determining the scope of their liability, the two documents should be read together. Though the liability of a surety is in strictissimi juris, his undertaking must be given a fair and reasonable construction, and the intention of the parties sought to be ascertained, guided by the same rules applicable to the construction of contracts in general. Smith v. Molleson, 148 U. T. 241, 246. However, the question whether such damages as are stipulated in the gross amount fixed for a failure to perform a contract arc in the nature of a penalty is one of considerable difficulty, and the authorities upon the subject are replete with contradictions. Hothing can be gained by a review of the numerous cases where the question is discussed. One rule of construction, however, seems established. That is, that the courts are to be governed by the intention of the parties, to be gathered from the language of the contract itself, and from the nature of the circumstances of the case. Colwell v. Lawrence, 38 IST. T. 71; Kemp v. Knickerbocker Ice Go., 69 id. 45. In Hosmer v. True, 19 Barb. 106, 109, Johnson, J., says: “ Whether a sum agreed to be paid as damages for the violation of an agreement, shall be considered as liquidated damages or only a penalty, depends upon the meaning and — 551 — intent of the parties as gathered from a full view of the provisions of the contract, the terms used to express such intent, and the peculiar circumstances of the subject-matter of the agreement (Dakin v. Williams, 17 Wend. 447; s. c., 22 id. 201). The contract in such cases, as in every other, is to govern, and the true inquiry is, what was the undertaking? Whether it was folly or wisdom for the contracting parties thus to hind themselves is of no consequence if the intention is clear.” Mundy v. Culver, 18 Barb. 336, 338, is authority for the statement that there are various legal rales for ascertaining whether a sum named in a contract to be paid by a defaulting party was intended as liquidated damages or a penalty merely. Among these rules is one well established by numerous decisions, that when a contract is such that the damages, in case of a violation of it, will be uncertain in their nature and amount and the parties have stipulated that in the event of a breach a certain sum shall be paid by the party in default as liquidated damages, they will be regarded as having so intended, and that sum will be treated as the measure of damages. Scdg. Dam. 421; Holmes v. Holmes, 12 Barb. 137; Dakin v. Williams, sufra. Considering the subject-matter of the agreement in the case at bar, the nature of the transaction that the bond was intended to facilitate, and giving a natural construction to the provisions of the contract and bond in seeking therefrom the intention of the parties, it seems quite clear to me that the defendant Rosoff bound himself to remove certain specified debris within a certain time limitation, and that upon a breach of his obligation both defendants obligated themselves to respond in damages to- the plaintiff in such sum, not exceeding $1,000, as he may have been damnified, governed by the proper measure of damages in such cases. The defendants urge that the plaintiff failed to prove that he suffered any actual damage whatever, as the evidence showed that the premises in question, with the debris thereon, were sold and conveyed to a third person. When the breach of said contract occurred the rights and liabilities of the parties became fixed and determinable. The breach occurred, as found by the jury, thirty days after the — 552 — date of the contract, when the defendant Rosoff had failed to remove the debris pursuant to contract, and the plaintiff was entitled then to recover damages to be measured by the cost of removal of the debris that the defendant Rosoff should have removed. How can a subsequent history of the premises in question affect the rights and obligations of the parties as they then existed ? When we regard the fact that this action may have come to trial at the first Trial Term of this court after November 2, 1905 (the date of the joinder of issue herein) and before the premises were sold and conveyed, the fallacy of this proposition becomes apparent. Should the fact that our calendars are congested, and that two and a half years elapsed from the joinder of issue herein till the trial of said issue, narrow the plaintiff’s rights or affect the defendants’ liabilty ? In the case of Scott v. Haverstraw Clay & Brick Co., 135 N. T. 141, involving the question as to the measure of damages for a breach of a covenant by which the defendant bound itself to leave the surface of a brick yard leased by it in a smooth condition, which condition was necessary in order to manufacture brick successfully in the manner in general use when the contract was made, at page 150, the court says: “ The fact that since the lease was made other methods for mailing brick have been devised, which rendered this condition of the surface unnecessary, does not change the construction to be put upon the covenant, nor the defendants’ liability under it.” To the same effect is Appleton v. Marx, 191 N. T. 81. The question raised by the defendants as to the sufficiency of the evidence as to the quantity of debris other than old mortar and cement left upon the premises is answered by the fact that the evidence on this element of the case was submitted to the jury, who found by their verdict what proportion of the unremoved debris was other than old mortar and cement. Assuming for the sake of argument that the evidence on this proposition was meager, the jury passed upon the credibility of the witness on this point and the probability of his evidence, and found the facts substantially to be as testified to. There is sufficient, in my opinion, to support the verdict, and I am loath to disturb it. Motion to — 553 — sot aside the verdict and for a new trial denied. The defendants may have ten days5 stay of execution after notice of entry of judgment and .thirty days to make and serve a case. Motion denied.