Buffalo Elec. Co. v. State

• Decision Date: 17 January 1963
• Docket Number: No. 32217,32217
• Citation: 236 N.Y.S.2d 581,17 A.D.2d 523
• Parties: BUFFALO ELECTRIC CO., Inc., Appellant, v. The STATE of New York, Respondent. Claim
• Court: New York Supreme Court — Appellate Division

Page 581

236 N.Y.S.2d 581

17 A.D.2d 523

BUFFALO ELECTRIC CO., Inc., Appellant, v. The STATE of New York, Respondent.

Claim No. 32217.

Supreme Court, Appellate Division, Fourth Department.

Jan. 17, 1963.

William E. Miller, Buffalo, for appellant (Warner F. Thompson, Lockport, of counsel).

Louis J. Lefkowitz, Albany, for respondent (Harold J. Hughes, Jr., and Paxton Blair, Albany, of counsel).

Before WILLIAMS, P. J., and BASTOW, GOLDMAN, HALPERN and McCLUSKY, JJ.

PER CURIAM.

This case is before us for a second time. Originally, the claim had been dismissed by the Court of Claims upon the ground that the claim was barred as a matter of law by virtue of the claimant's having accepted a check in payment of the undisputed contract balance, in view of the provision of the contract that 'The acceptance by the Contractor of the last payment on this contract as hereinbefore provided, shall be and shall operate as a release to the State of New York * * *' (4 Misc.2d 172, 174, 158 N.Y.S.2d 265, 267). Upon appeal, this court reversed and remitted the case to the Court of Claims to make findings of fact on the question of whether the check was intended and understood 'to be a 'last payment' in full of all claims', within the meaning of the contract provision (9 A.D.2d 372, 374, 194 N.Y.S.2d 72, 74). Instead of making clearcut findings of fact on this question, the Court of Claims indicated its disagreement with the reasoning of this court and again dismissed the claim (27 Misc.2d 527, 212 N.Y.S.2d 269).

In these circumstances, we are constrained to reverse the judgment of the Court of Claims and to make a final disposition of the issue of release upon the basis of our own findings of fact.

We find that it is impossible upon the present record to determine what the intention of the State was, with respect to the check which it sent to the claimant. The check was in the exact amount of the unpaid contract balance which was concededly due and owing to the claimant. The check bore no notation of any kind. There was no covering letter. The State had been advised by letter from the claimant that the claimant intended to make a claim for damages or additional costs caused by the State's delay and interference with the work. Under the circumstances, the check may have been tendered by the State on either of two bases: (1) it may have been intended as a payment of the undisputed contract balance, to discharge its conceded obligation to pay that amount and to avoid the running of interest thereon (cf. Wood v. State, 12 N.Y.2d 25, 186 N.E.2d 406, 234 N.Y.S.2d 204; Bianchi & Co. v. State, 27 Misc.2d 524, 212 N.Y.S.2d 266), leaving the claim for damages or additional costs for subsequent negotiation or litigation; (2) the check may have been intended to constitute a technical 'last payment' within the meaning of the release provision of the contract, in full of all claims, including the damage claim which was then the subject of the negotiation between the claimant and the State. It is conceded that the claimant could have obtained immediate payment of the undisputed balance, without releasing its additional claim, merely by filing a claim therefor in the Court of Claims and moving for judgment, or by moving for severance and partial judgment, if it filed a joint claim both for the contract balance and the additional damages (Rusciano & Son Corp. v. State, 201 Misc. 690, 110 N.Y.S.2d 770, aff'd. 281 App.Div. 733, 118 N.Y.S.2d 77). In this anomalous situation, if the State wished to invoke the release provision, and to tender payment of the contract balance to the claimant only upon condition that it be accepted as a 'last payment', it was the State's duty to give explicit notice to the claimant, either by a notation on the check or by a covering letter, that the check was tendered on that basis, that is, as a 'last payment' in full of all claims (cf. Hudson v. Yonkers Fruit Co., 258 N.Y. 168, 174, 179 N.E. 373, 376, 80 L.R.A. 1052). In the absence of such explicit notice, the recipient of the check had the right to assume that it was tendered merely to discharge the State's obligation to pay the undisputed contract balance. The claimant accepted the check on that assumption and to make its understanding and intention crystal clear, it endorsed upon the check the notation that the check was 'accepted without waiver of rights to proceed against the State of New York to recover for additional costs, as stated in our letter of June 19th to Mr. C. J. White, State Architect'. We therefore find that the claimant did not intend to accept the check as a 'last payment' within the meaning of the release provision of the contract and that, under the circumstances, he had the right to accept the check upon the assumption that the State did not intend the check to constitute such a 'last payment'. The acceptance of the check was therefore not a bar to the assertion of the present claim for damages or additional costs (Fredburn Construction Corporation v. City of New York, 280 N.Y. 402, 21 N.E.2d...