Susswein v. Pennsylvania Steel Co.

• Court: U.S. District Court — Southern District of New York
• Citation: Susswein v. Pennsylvania Steel Co., 184 F. 102 (S.D. N.Y. 1910)
• Decision Date: 17 December 1910
• Parties: SUSSWEIN v. PENNSYLVANIA STEEL CO.

184 F. 102

SUSSWEIN v. PENNSYLVANIA STEEL CO.

United States Circuit Court, S.D. New York.

December 17, 1910

The rule that where one party has performed an obligation and without excuse refuses to complete the performance which as a whole is a condition precedent, he may not sue on a quantum meruit for what he has done, does not apply where the performance is not a condition precedent to the express obligation arising under the contract.

Plaintiff sued at law to recover damages for breach of defendant's covenant contained in a lease to grade certain property. In a former action in the state court (117 N.Y.S. 436) this covenant had formed the basis of a counterclaim which was disallowed on the ground that it was premature, and in that action the Pennsylvania Steel Company recovered for breach of plaintiff's covenant to pay $3,500 on completion of the dock referred to in the lease. On the filing of the counterclaim in such suit, the steel company discontinued performance of its covenant to grade, and when its own business was completed on the premises leased moved off prior to the time specified for the expiration of the lease. The following is a copy of the lease:

'This agreement entered into this ninth day of October nineteen hundred and six, between Henry M. Susswein, of the city and county of New York, and the Pennsylvania Steel Company, a corporation of the state of Pennsylvania 'Witnesseth: That the said Henry M. Susswein hereby leases to the said Pennsylvania Steel Company a tract or parcel of land, described and bounded as follows:

'Commencing at a point where the northeasterly line of land recently acquired by the city of New York, for the building of Blackwell's Island Bridge intersects the pier and bulk head line, approved by the Secretary of War June 1st, 1893. Thence running northeasterly along the said bulk head line a distance of one hundred and fourteen (114) feet; thence southeasterly and parallel with the northeasterly line of the property so acquired by the city of New York a distance of ninety feet (90); thence southwesterly and parallel with said bulk head line a distance of fifty-nine (59) feet; thence southeasterly and parallel with the line of the property of the city of New York to a point on the northwesterly side of Vernon avenue, at a distance of sixty-five (65) feet northeasterly from the point where the line of said Vernon avenue intersects the northeasterly line of land recently acquired by the city of New York for the Blackwell's Island Bridge; thence southwesterly along the line of Vernon avenue, a distance of sixty-five (65) feet to the land of the city of New York; thence along the boundary line of the said land of the city of New York, to the point or place of beginning, upon the said bulk head line.

'Such property being shown upon a blue print drawing entitled 'Property Plot' to be leased from Henry M. Susswein dated September 27th, 1906, initialed by the parties hereto.

'To have and to hold the said above mentioned property for a period of two years from the date of the completion of the dock to be erected, and hereinafter mentioned, together with the right of free and absolute enjoyment of said property and all that portion of the dock to be erected included herein. The building of said dock, however, not to take more than three months and to commence promptly upon the granting of a clear title to land under water, by the land board of the state of New York.

'In consideration of the aforesaid lease, the Pennsylvania Steel Company agrees as follows:

'To build and complete and furnish all necessary material for a crib dock upon the said premises and adjoining premises belonging to the said H. M. Susswein, in accordance with the plans and specifications annexed hereto, the said dock to belong to the said Susswein.

'The said Henry M. Susswein agrees on his part to pay to the Pennsylvania Steel Company in further consideration, the sum of thirty-five hundred (3,500) dollars in cash upon the completion of said dock.

'The said Pennsylvania Steel Company further agrees to make the necessary fill inside of said crib from the upland and to grade the remainder of said land from Vernon avenue to said dock.

'The said Pennsylvania Steel Company further agrees that if it finishes its work upon the Blackwell's Island Bridge before the period of this lease expires, it will vacate and surrender the said property to the said Henry M. Susswein, when it completes said work, and it further agrees that when it surrenders the said property to the said Henry M. Susswein, it will put said dock in the condition called for in the plans and specifications, reasonable wear and tear excepted, and that it will remove all structures and materials placed upon said property by it within the period covered by this lease.

'In witness whereof the parties hereto have hereunto placed their hands and seals the day and year first above written.

'(Corporate Seal of The Pennsylvania Steel Company is here affixed.)

'The Pennsylvania Steel Co.,

'By E. C. Felton, Pres.

'Attest: (Signature unintelligible) Secretary.

'Witness as to Henry M. Susswein:

Henry M. Susswein. (Seal.)

'Walter Coles Cabell.'

Roger Lewis (Bronson Winthrop and George Roberts, of counsel), for plaintiff.

Battle & Marshall (H. Snowden Marshall, of counsel), for defendant.

HAND District Judge.

The phrase 'grade the remainder of said land from Vernon avenue to said dock ' means 'uniformly grade' such land, and therefore the defendant has from any point of view never performed its obligation, because it has never uniformly graded the leased portion of the land from Vernon avenue to the dock. It will be more orderly to consider under the question of damages whether it was also obliged to grade the unleased portion. At present I consider merely the question of breach.

The question is whether the obligation to grade was conditional upon the performance of the promise to pay $3,500. It is undoubtedly the general rule to construe promises as dependent in cases of any doubt, nor do I think that there is a difference in principle in the case of leases, though usually in application covenants in leases are construed as independent. Surplice v. Farnsworth, 7 Man. & Gr. 576; Thompson E.L. Co. v. Durant L.I. Co., 144 N.Y 34, 39 N.E. 7. In this case, however, I am satisfied that the promise to grade was independent of the promise to pay. By the grant the lessee had obtained the absolute right of possession for the whole term. There being no condition subsequent in the lease, no default of his could deprive him of his quiet enjoyment. For this term he promised to build the dock and to grade the land. Thrown in parenthetically after the promise to build the dock and before the promise to grade was the promise to pay $3,000 'upon completion of the dock.' Its position in the contract indicates that this covenant relates to the building of the dock, and the time of payment strongly corroborates this conclusion. Indeed no person looking impartially at the contract could doubt that the sum was to pay for the dock pro tanto, and was not to pay in advance for any part of the grading. If so, the case is within one of the tests of Lord Mansfield in Boone v. Eyre, 1 H.Bl. 273, because the payment does not go to the whole of the consideration of the contract, but is apportioned to the promise to build the dock. Ellen v. Topp, 6 Ex. 441; Howe v. Howe & Owen Ball Bearing Co., 154 F. 820, 83 C.C.A. 536; Kauffman v. Raeder, 108 F. 171, 47 C.C.A. 278, 54 L.R.A. 247; Palmer v. Meriden Britannia Co., 188 Ill. 508, 59 N.E. 247. However, that may not always be conclusive. Thus the failure to pay for a past installment of work already performed or of goods delivered would excuse further work or deliveries. Phillips & Colby Construction Co. v. Seymour, 91 U.S. 646, 23 L.Ed. 341; Graf v. Cunningham, 109 N.Y. 369, 16 N.E. 551; Wharton v. Winch, 140 N.Y. 287, 35 N.E. 589. It is not, therefore, always enough that the default should be in performance of a part of the contract which is clearly apportioned to a stipulation on the other side already performed. One is not necessarily required to go on indefinitely performing a contract for another who remains persistently in default, even in respect of a covenant of the contract which is apportionable to a part of the performance. It is not enough, therefore, in the case at bar, that the payment was clearly intended to be applied upon the dock. Nevertheless, the facts here still warrant construing the covenants as independent. The promise to grade was of much more moment than the promise to pay $3,500, as the proof on this trial shows. Suppose that the lessor was unable to get the money to make the payment at the time when...