McCreery v. Day

• Decision Date: 14 January 1890
• Citation: 23 N.E. 198,119 N.Y. 1
• Parties: McCREERY et al. v. DAY et al.
• Court: New York Court of Appeals Court of Appeals

119 N.Y. 1

23 N.E. 198

McCREERY et al.

v.DAY et al.¹

Court of Appeals of New York.

Jan. 14, 1890.

Appeal from supreme court, general term, first department.

Action by William McCreery and Wallace C. Andrews against Melville C. Day and George J. Forrest, as executors of the estate of Cornelius K. Garrison, for breach of contract. Judgment for defendants on the pleadings was affirmed by the general term, and plaintiffs appeal.

J. W. Hawes, for appellants.

Melville C. Day, for respondents.

ANDREWS, J.

The parties, by their agreement indorsed on the contract of March 2, 1882, in terms annulled that contract, and declared that it should be of no further effect. The claim that the annulment of the contract did not discharge Garrison's obligation under the original contract to pay his proportion of expenditures made by the plaintiffs for the construction of the Pittsburgh, Youngstown & Chicago Railroad, between the date of the contract and its annulment, depends on the intention to be deduced from the agreement of annulment, construed in light of the attending circumstances. Where a contract is rescinded while in course of performance, any claim in respect of performance, or of what has been paid or received thereon, will ordinarily ‘be referred to the agreement of rescission, and, in general, no such claim can be made, unless expressly or impliedly reserved upon the rescission.’ Leake, Cont. 788, and cases cited. The agreement annulling the original contract recites that that contract had been ‘superseded by agreements and arrangements made in lieu thereof,’ embodied in Garrison's letter of November 6, 1882, and the several contracts executed by the parties to that contract, and others bearing date October 25, 1882. In construing the scope of the agreement annulling the original contract, the letter and the contracts of October 25, 1882, are to be deemed incorporated into the agreement. Construing these several writings together, they plainly show that the parties intended that Garrison should be discharged from all liability under his contract of March 2, 1882, for any expenditures theretofore made, or thereafter to be made, in constructing the line between Pittsburgh and Newcastle Junction. The letter was written after Garrison had received the contracts dated October 25, 1882, for execution, and declares that he will sign them on the condition and understanding that he is not to pay anything more than Mr. Humphrey's company pays, under the plaintiff's agreement with him of April 13, 1882; ‘that is, $150,000, and one-fourth of the cost of the road to Newcastle Junction after that date.’ The agreement with Mr. Humphrey of April 13, 1882, provided for the construction of the part of the line of the Pittsburg, Youngstown & Chicago Railroad between Newcastle Junction and Akron, by a new corporation to be formed, and that Humphrey should pay the plaintiffs $150,000 for expenditures incurred and rights acquired on that branch of the road prior to the making of the contract, and also one-fourth of all expenditures thereafter made in its completion. The letter goes on to state that the agreement with Mr. Humphrey was made ‘after consulting with me; and, as it insured my road [Wheeling & Lake Erie Railroad] a line to Pittsburgh, I was ready to assent to it, in place of the agreement of the 2d of March; and you know I have so considered it since, and that I was owner of one-fourth of the new company, all previous agreements between us being superseded. I do not want any interest in the road from Newcastle Junction to Pittsburgh. I will pay whatever Mr. Humphrey's company has paid on the agreement of the 13th April.’ The clear import of the proposition of Mr. Garrison in his letter is that he would sign the contracts of October 25, 1882, provided he should be placed in the same position in respect to the enterprise as that occupied by the company represented by Mr. Humphrey, and be relieved from all interest in, or obligation to contribute to the construction of, the part of the Pittsburgh, Youngstown & Chicago Railroad between Pittsburgh and Newcastle Junction. Garrison thereafter executed the contracts of October 25, 1882, relating to the construction of the road between Newcastle Junction and Akron, whereby he assumed other and different obligations from those he had assumed by his contract with the plaintiffs of March 2, 1882.

The main claim in the action is to recover from Garrison's estate, under the contract of March 2, 1882, for a share of expenditures made by the plaintiffs in the construction of the part of the Pittsburgh, Youngstown & Chicago Railroad between Pittsburgh and Newcastle Junction after the date of that contract, and before the execution of the annulment agreement. The agreement annulling the prior contract is supported by an adequate consideration. The new obligation which Garrison assumed under the contracts of October 25, 1882, was alone...