Mosler Safe Co. v. Maiden Lane Safe Deposit Co.

• Decision Date: 15 November 1910
• Citation: 93 N.E. 81,199 N.Y. 479
• Parties: MOSLER SAFE CO. v. MAIDEN LANE SAFE DEPOSIT CO.
• Court: New York Court of Appeals Court of Appeals

199 N.Y. 479

93 N.E. 81

MOSLER SAFE CO.

v.MAIDEN LANE SAFE DEPOSIT CO.

Court of Appeals of New York.

Nov. 15, 1910.

Appeal from Supreme Court, Appellate Division, First Department.

Action by the Mosler Safe Company against the Maiden Lane Safe Deposit Company. From a judgment for plaintiff, unanimously affirmed by the Appellate Division (123 N. Y. Supp. 1130), defendant appeals. Affirmed.

Alfred Wheat, for appellant.

Benjamin N. Cardozo and Malcolm Sundheimer, for respondent.

GRAY, J.

The plaintiff, in this action, has sought to recover the balance of the moneys due under three contracts with the defendant, which provided for the construction, in one, of a fireproof vault, in another, of a fireproof and burglar proof safe, and, in another of a fire and burglar proof vault. These contracts were, substantially, the same in their general provisions and each called for the completion of the work by a fixed date. Each contained an agreement for liquidating the damages, in the event of noncompletion by the time fixed; the several agreements differing only in the amount. The agreement in the first contract reads ‘that time is of the essence of this contract, and whereas failure to thus complete the work within the time mentioned will cause serious loss and damage to the second party (the defendant), the precise extent of which might be difficult of estimation in money, the first party (the plaintiff) agrees to pay the sum of $25 per day to the second party as liquidated damages for such day's delay in the completion of said work.’ In the second and third contracts, the amount is fixed at $25 and at $150, respectively. The answer of the defendant to the three causes of action, founded upon these three contracts, admitted due performance by the plaintiff, except as to the time of completion, and set up counterclaims for the liquidated damages provided in each contract to be paid, upon the basis of the number of days, which had elapsed after the date fixed for completion. There was no dispute as to the number of days' delay, which ranged from 117 days, under the first contract, to 211 days, under the second contract, and to 193 days, under the third contract. At the trial of the action there was much evidence bearing upon the subjects of the preparation and approval of the various drawings, designs, and detail plans, and of the conduct of the parties and of the defendant's architect, with reference thereto. It was the contention of the plaintiff that it showed that the defendant delayed the progress of the work in deviation from the plans and in unreasonable omissions to pass upon the drawings, and that, in such, and in other ways, it was prevented from completing the work by the latter's default. The defendant contended that the evidence did not show it to be responsible for the delay, and that, so far as the acts of its architect were concerned, he was superintending the work, under the agreement, and had acted in good faith. As to the first cause of action for the fireproof vault, the plaintiff did not dispute its liability for the delay, and the jury was directed to allow the defendant its counterclaim in full. As to the other claims of the plaintiff, upon the second and third causes of action, the trial judge instructed the jury, in substance, that the defendant was entitled to recover damages, as stipulated in the contracts, for the delay in completing the work, unless they were satisfied that a substantial part of said delay was caused by its own acts, or those of its architect. The jury returned a verdict in the plaintiff's favor, and the judgment thereupon entered has been affirmed by the unanimous vote of the justices of the Appellate Division. Upon this appeal by the defendant, we must presume that the evidence was sufficient to sustain the finding of the jury that the defendant was responsible for a substantial part of the delay in the completion of the contracts.

The correctness of the judgment below is attacked upon the ground that the court erred in its instructions to the jury upon the law, and the following rulings raise the question we are to consider: At the plaintiff's request, the trial judge charged as follows: ‘If any substantial part of the delay in the completion of said vault (or of the fireproof safe, in the other cause of action) was caused by the wrongful acts of the defendant or its architect, or by alterations or deviation from the plans and specifications, or by the failure to approve drawings within a reasonable time, or by arbitrary and capricious acts, the entire cause for liquidated damages was canceled and abrogated, and the defendant is not entitled to recover the same.’ The trial judge refused to charge, at the defendant's request, that it was ‘entitled to recoup the liquidated damages for each and every day that the contract time was exceeded by the time of the actual performance, which was not caused by any act, or fault, of the defendant, or the superintendent’; or that ‘if the jury believed that there was any delay occasioned by the arbitrary, or unreasonable, act of the defendant, through the action of the superintendent, or otherwise, then the jury must consider what would have been a reasonable time to complete, after allowing to the plaintiff the time in which it was delayed.’ To these rulings, and to others raising the same questions of law, the defendant excepted.

The appellant, preliminarily, contends that it was erroneous to submit to the consideration of the jury the acts of the architect, in passing upon the question of the responsibility for the delay; inasmuch as his acts were not impeachable except for fraud, or bad faith. It is argued that he was acting, throughout, under the provisions of the contract and in such a capacity, as between the parties, that his acts could not be questioned, unless so arbitrary and capricious as to indicate fraud or bad faith. Without discussing that point at any length, I think it will suffice to say that, while the contract did constitute the architect named therein the final arbiter in disputes ‘regarding the construction of the specifications' and ‘as to whether materials used and work done were according to their true intent and meaning,’ he was, in other respects, the agent of the appellant. It was provided that the work was to be done to his satisfaction and under his direction, and in determining upon the plans and drawings, or upon changes therein, or in the work, he was the representative of the appellant. It was not necessary, if the jury believed that through any acts of his, or through his omissions to act within a reasonable time, substantial delays in the completion of the work were caused, that his conduct should indicate fraud or bad faith. The question was whether the appellant, through its architect, or otherwise, was responsible for materially delaying the respondent in the completion of the work within the time specified. The question of the architect's good, or bad, faith was not material.

It having been conclusively determined that the defendant was responsible for a substantial part of the delay in the completion of the work, the principal question arises upon the instruction of the trial court that thereby the right to counterclaim for the liquidated damages was abrogated. So far as I am aware, this court has not pronounced upon this precise question, and the courts below, in determining as they have, have followed (as I infer, in the absence of the expression of any opinion) the rule as it has been asserted in ...