United States Trust Co. of New York v. O'Brien

• Decision Date: 09 October 1894
• Citation: 143 N.Y. 284,38 N.E. 266
• Parties: UNITED STATES TRUST CO. OF NEW YORK v. O'BRIEN.
• Court: New York Court of Appeals Court of Appeals

143 N.Y. 284

38 N.E. 266

UNITED STATES TRUST CO. OF NEW YORK

v.O'BRIEN.

Court of Appeals of New York.

Oct. 9, 1894.

Appeal from superior court of New York city, general term.

Action by the United States Trust Company of New York, as trustee, against Miles M. O'Brien. From a judgment of the general term affirming a judgment for plaintiff for nominal damages merely, he appeals. Reversed.

Edward W. Sheldon, for appellant.

Peter A. Hendrick, for respondent.

PECKHAM, J.

The plaintiff commenced this action to recover damages for the breach of certain covenants contained in a lease of premises situated in the city of New York to the defendant for a dwelling house. After the evidence was all in, the court directed a verdict for the plaintiff for six cents damages only; and, the judgment entered thereon having been affirmed by the general term of the New York superior court, the plaintiff has appealed here, and it now maintains that the question of the amount of damages arising from the breach of the covenant should have been submitted to the jury. The plaintiff is the substituted trustee under the will of William H. Belden, deceased. Its predecessor executed the lease to the defendant for a term of three years, expiring on the 1st of May, 1889. The lease contained a covenant against subletting or assigning on the part of the lessee, and also a covenant on his part that at reasonable hours in the daytime he would permit the lessor or his agent to show the premises to such persons as he desired for the purpose of selling or leasing the same, and that he would permit the usual notice of ‘To let’ to be posted on the premises, and to remain there without molestation. In November, 1888, the defendant vacated the premises, and sublet them to a third party for a portion of the term remaining. This person, being in possession, refused to permit the posting of any notice, and refused entrance to any one for the purpose of looking at the house with a view of purchasing or leasing the same. The house remained unoccupied, and without being leased or sold, until February 1, 1890, when it was leased for $900 a year. Evidence was given that the rental value was in May, 1889, $1,000 a year. When the house was vacated, it was not in a habitable condition, and repairs were made on it, which consumed two or three weeks. In order to secure tenants, and as soon as the lease expired, bills were put up, and the house was continually offered for rent, without success, until February following. The plaintiff then brought this action to recover damages for the breach of the covenants not to sublet, and to permit the placing of the notice on the house, and to allow the premises to be shown for the purpose of selling or leasing the same. The plaintiff recovered a verdict on the first trial, which was set aside upon appeal by the general term, and upon the second trial the court directed the verdict of six cents as stated. The plaintiff now urges that the direct result of the violation of these covenants was the failure to rent the house from May 1, 1889, until February 1, 1890, and that damages might have been awarded to it by the jury on the evidence for that time at the rate of $1,000 per year. The courts below have held as matter of law that the failure to rent could not upon the evidence be regarded as the natural or necessary consequence of the breach of his covenants by the defendant, and hence directed a verdict for nominal damages only.

It is clear, and so it has been held in many cases, that the rule of damages should not depend upon the form of the action. In all civil actions the law gives, or endeavors to give, a just indemnity for the wrong which has been done the plaintiff, and whether the act was of the kind designated as a ‘tort,’ or one consisting of a breach of a contract, is on the question of damages an irrelevant inquiry. As was said by Rapallo, J., in Baker v. Drake, 53 N. Y. 211, 220, the inquiry is, what is an adequate indemnity to the party injured? and the answer cannot be affected by the form of the action in which he seeks his remedy. In special cases where punitive or exemplary damages are allowed, an exception exists to the general rule of indemnity. Swain v. Schieffelin, 134 N. Y. 471, 474,31 N. E. 1025. It is a mistake, therefore, to say that liability for breach of covenant is less extensive than for that of tort, if cases of tort be excluded in which punitive damages are allowed. In an action for a breach of contract, the damages recoverable are those which the parties may fairly be supposed when they made the contract to have contemplated as naturally following its violation. Rochester Lantern Co. v. Stiles & Parker Press Co., 135 N. Y. 209, 217,31 N. E. 1018. Speculative, contingent, and remote damages are excluded. The courts below have agreed that this is the true rule of damages, and, in applying the rule to this case, have held that the proof of damage and the cause thereof were too uncertain and speculative to authorize a recovery for any other than nominal damages; that there was no solid or substantial basis for the jury to find the fact that the refusal to perform the covenant was the cause of the loss of rent. In using the words ‘uncertain, speculative, and contingent,’ for the purpose of excluding that kind of damage, it is not meant to assert that the loss sustained must be proved with certainty of a mathematical demonstration to have been the necessary result of the breach of covenant by defendant. The plaintiff is not bound to show to a certainty that excludes the possibility of doubt that the loss to him resulted from the action of the defendant in violating his agreement. In many cases such proof cannot be given; and yet there might be a reasonable certainty, founded upon...