Crouch v. Gutman

• Decision Date: 31 May 1892
• Citation: 31 N.E. 271,134 N.Y. 45
• Parties: CROUCH et al. v. GUTMAN.
• Court: New York Court of Appeals Court of Appeals

134 N.Y. 45

31 N.E. 271

CROUCH et al.

v.GUTMAN.^*

Court of Appeals of New York, Second Division.

May 31, 1892.

Appeal from supreme court, general term, fifth department.

Action by George W. Crouch and Frank P. Crouch against Max L. Gutman. From a judgment of the general term, affirming a judgment entered on report of referee for plaintiffs, defendant appeals. Affirmed.

FOLLETT, C. J., and VANN and LANDON, JJ., dissenting. 10 N. Y. Supp. 275, affirmed.

S. D. Bentley, for appellant.

Charles M. Williams, for respondent.

The other facts fully appear in the following statement by BRADLEY, J.:

The action was brought to recover money alleged to be due from the defendant for work on his building performed by John Wadsworth & Son, and to which the plaintiffs had by transfer become entitled. It appears that on September 28, 1886, the defendant entered into contract in writing with John R. Strauchen, whereby the latter agreed to furnish the materials for and erect, and by the 1st day of April, 1887, to finish, a brick block and apartment house for the defendant in the city of Rochester, in the manner and according to the specifications referred to, for the sum of $16,500, payable in installments of 80 per cent. of the value of the work as it progressed, and the balance on the satisfactory completion of the entire work. ‘Payments made only on the architect's certificate, and such certificate shall be a condition precedent to the right of recovery under this agreement.’ The defendant reserved the right to make, at any time during the progress of the work, ‘any alterations, deviations, additions, or omissions in the work or materials,’ and it was provided that in such case the value should be added or deducted accordingly. And, should the contractor at any time during the progress of the work refuse or neglect to supply sufficiency of materials or workmen, the defendant should have the power, after three days' notice in writing to do so, to finish the work, and the expense thus incurred by him should be deducted from the amount of the contract price. It was also agreed that for each and every day's delay in the performance of the agreement after the term there specified there should be allowed and paid by the contractor to the defendant $10 damages for such delay, if it should arise from any act or default on the part of the former. Afterwards, and by contract of the same date, Strauchen sublet the carpenter work of the building to John Wadsworth & Son at the price of $6,000, with the knowledge and assent of the defendant. This contract was also in writing, and contained the same provisions as did that first mentioned. And upon it Strauchen indorsed the following order: ‘M. L. Gutman: Please pay to the order of John Wadsworth & Son the amount of the within contract, when the work is satisfactorily performed, in installments, and charge to the account of JOHN R. STRAUCHEN.’ The original and subcontractors proceeded with the work, and the defendant, from time to time, made payments to the subcontractors, amounting in the aggregate to $3,869; and in addition he paid, August 25, 1887, on their order drawn upon him, $500 to O'Corr & Co., July 5, 1887, which he accepted, payable out of the architect's next estimate. The Wadsworths, being indebted to the plaintiffs for lumber used in the building on the 27th of June, 1887, gave to them an order of that date on the defendant, as follows: ‘Max L. Gutman. Please pay G. W. & F. P. Crouch sixteen hundred and fifty dollars, and charge the same to our contract. JOHN WADSWORTH & SON,’-which was presented to the defendant, and accepted by him July 6, 1887, by indorsement thereon, as follows: ‘This order is accepted, payable out of the balance which may be due Messrs. Wadsworth & Son when the building is completed to the extent of such unpaid balance, and no more, and on the architect's certificate only. MAX L. GUTMAN.’ This constitutes, with a formal assignment afterwards made by the Wadsworths to them, the alleged claim of the plaintiffs against the defendant. The Wadsworths continued their work on the building until about July 30, 1887, when they ceased work upon it; and that day the defendant gave to Strauchen notice in writing that, unless he supplied a sufficiency of workmen and material to proceed with the work in finishing the building in accordance with the contract within three days, he would employ workmen and furnish material to complete it, and charge the expense to his account. And after waiting that time the defendant employed one Pike, a carpenter, to remedy the defects in the work; and the value of the labor on the building performed by Pike, including materials, and of some painting done by another under Pike's directions, amounted to $439.29. On August 5, 1887, Strauchen gave the defendant notice to make no further payments to the Wadsworths on account of the work; and on the 8th of that month Strauchen made a settlement by which there was deducted from the contract price ($16,500) the amount of the contract with the Wadsworths, $6,000, and the payments which had been made to Strauchen during the progress of the work, and the sum of $1,499.55 for stipulated damages, which included $1,300 for 130 days' delay from April 1 to August 8, 1887, leaving as a balance $4,000, for which the defendant's check was given to him in full of all demands, except as to balance due on the carpenter work embraced in the Wadsworths' contract. The referee, having found that the contracts were substantially performed, presented the following statement, applicable to that of the subcontractors:

+-------------------------------------------------+
                ¦Gave them credit for contract price....¦$6,000 00¦
                +---------------------------------------+---------¦
                ¦And for extra work.................... ¦260 00   ¦
                +---------------------------------------+---------¦
                ¦                             ¦         ¦$6,260 00¦
                +-----------------------------+---------+---------¦
                ¦And made the deductions for  ¦         ¦         ¦
                +-----------------------------+---------+---------¦
                ¦payments made Wadsworths     ¦$3,869 00¦         ¦
                +-----------------------------+---------+---------¦
                ¦Payment of O'Corr order      ¦500 00   ¦         ¦
                +-----------------------------+---------+---------¦
                ¦For hardware furnished by    ¦         ¦         ¦
                +-----------------------------+---------+---------¦
                ¦defendant                    ¦293 64   ¦         ¦
                +-----------------------------+---------+---------¦
                ¦For tiling furnished by him  ¦148 50   ¦         ¦
                +-----------------------------+---------+---------¦
                ¦For iron pipe furnished by   ¦         ¦         ¦
                +-----------------------------+---------+---------¦
                ¦him, $14, and register and   ¦         ¦         ¦
                +-----------------------------+---------+---------¦
                ¦transom guard omitted by     ¦         ¦         ¦
                +-----------------------------+---------+---------¦
                ¦the contractor, $12          ¦26 00    ¦         ¦
                +-----------------------------+---------+---------¦
                ¦For amt. of bills of Pike &  ¦         ¦         ¦
                +-----------------------------+---------+---------¦
                ¦Pierpont for the work, etc., ¦         ¦         ¦
                +-----------------------------+---------+---------¦
                ¦done after the 3-days notice ¦439 29   ¦         ¦
                +-----------------------------+---------+---------¦
                ¦For omissions in work by     ¦         ¦         ¦
                +-----------------------------+---------+---------¦
                ¦consent of defendant         ¦145 00   ¦         ¦
                +-----------------------------+---------+---------¦
                ¦Cost of repairing defects in ¦         ¦         ¦
                +-----------------------------+---------+---------¦
                ¦work                         ¦205 00   ¦5,626 43 ¦
                +-----------------------------+---------+---------¦
                ¦                             ¦         ¦$ 633 57 ¦
                +-------------------------------------------------+
                

- And he directed judgment against the defendant for $633.57, with interest from October 1, 1887. Further facts, essential to the questions considered, appear in the opinion.

BRADLEY, J., ( after stating the facts.)

The acceptance of the order given by the Wadsworths to the plaintiffs upon the defendant was in terms conditional, and payment made dependent upon the completion of the building and on the architect's certificate; and by the contract such certificate was made a condition precedent to the right to any payments upon the work. No such certificate was obtained by the Wadsworths or the plaintiffs in support of the demand for payment of the amount of the order, or any portion of it, but upon application made to him November 29, 1887, by one of the plaintiffs for a final certificate on the work, the architect put his refusal in writing of that date, as follows: ‘Mr. F. P. Crouch: Replying to your request for final certificate on the Gutman contract, I regret that there are so many things which are imperfect that I am prevented from certifying to the satisfactory completion of the work under the contract. JAMES G. CUTLER, Architect.’ The parties to the contract by it made the architect's certificate essential evidence of performance, and of the right to payment founded upon it, and, unless its production was in some manner waived, or its necessity otherwise overcome or obviated, the failure to obtain it constituted a bar to recovery by the plaintiffs. Smith v. Brady, 17 N. Y. 173. In support of his conclusion the referee found that the contractor Strauchen substantially performed the work on his part, and that on his adjustment with the defendant there was deducted $199.55 for defective mason work, and $1,300 for delay from April 1 to August 8, 1887, in completing the work; and that the Wadsworths substantially performed the agreement on their part, though in some particulars their work was not first class, but there was no willful or intentional departure on their part from the terms of the contract, and that such defects did not pervade the whole work, and were ‘not so essential that...