De Luka v. . Goodwin

142 N.Y. 194 | NY | 1894

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] The sole question here arises as to the meaning of the guaranty signed by defendants.

The plaintiff had entered or was about to enter into a contract with Miller Ross to do the mason work upon some houses which they were then intending to erect in Brooklyn on land which they had purchased from the defendant Goodwin. They had agreed with Goodwin to build the houses of a specified kind, and he had agreed with them to loan them the sum of $15,000, to be secured by their bond and by a mortgage on the land. The loan was to be made in installments as the work progressed on each house and at certain specified stages of the work.

The agreement between plaintiff and Miller Ross was in writing, and the plaintiff was to be paid a certain named sum when the basement walls on any three buildings were built ready for the second tier of beams, and certain other sums when certain other and further work had been done, the sum total being $16,750. The defendants then signed the guaranty which follows the agreement between plaintiff and Miller Ross, and it is in this language:

"In consideration of the party of the second part above named entering into the covenants contained in the foregoing agreement, and in consideration of the sum of one dollar to us in hand paid, the receipt whereof is hereby acknowledged, we, Richard Goodwin and John W. Phelps, hereby jointly and severally guarantee to the said Toney De Luka, party of the second part as aforesaid, the payment of the several sums agreed to be paid to him in the foregoing agreement at the times and in the manner therein specified.

"Dated July eighth, 1890.

"GOODWIN PHELPS."

After the execution of the agreements above mentioned the plaintiff entered upon the work and did everything he was called upon to do by his agreement with Miller Ross up to the 26th of August, 1890, when they notified him to stop work, and it would have been necessary to stop in a few days in any event owing to their inability and failure to comply with their obligation to furnish timber so that the work could be carried on. The plaintiff was at all times ready, able and willing to carry on his contract with Miller Ross, and would have completed the work according to his contract if he had not been prevented by their action. The defendants on their part had also carried out their contract with Miller Ross, and the discontinuance of the work was not rendered necessary by reason of any failure on the part of the defendants.

The court found as a fact that after deducting from the contract price of the work the sum necessary to complete the performance of the contract by the plaintiff, and the sum already paid to him on account thereof, there would be a balance of $4,399. This sum the plaintiff claims the defendants must pay by reason of the above guaranty, although the houses have not been built or the work done as provided in the plaintiff's contract with Miller Ross.

If this guaranty is to be construed as one which guarantees the whole and entire performance of the contract on the part of Miller Ross, then the defendants would probably be liable, while if it be treated as one which simply guaranteed that Miller Ross would pay the plaintiff certain amounts of money at certain periods of the progress of the work provided for in the contract, it seems to be plain that the plaintiff has failed to prove his case.

We think the latter construction of the contract of guaranty is the true one.

The first reason that causes us to think so is that the contract itself says so in plain language. The defendants simply guarantee the payment of the several sums agreed to be paid the plaintiff by the agreement between him and Miller Ross at the times and in the manner therein specified. That seems to be a plain and unambiguous contract and one which does not require the aid of surrounding circumstances to make clear its meaning. But if they are looked at the meaning seems to remain the same. The defendant Goodwin owned the land which he sold to Miller Ross, and they were to put up the houses and he agreed to loan them $15,000 to be paid in installments as the work of building progressed. By a subsequent agreement Goodwin Phelps agreed to advance to Miller Ross an additional $1,000, secured by another bond and mortgage, and payable, with interest, on or before six months from their date. The circumstances surrounding the parties were such that defendants might be ready to make such a contract of guaranty as we think this was, and be at the same time quite unwilling to guarantee the full performance of the contract by Miller and Ross. If they simply were to guarantee the payment at the prescribed times they knew that as each installment became due the plaintiff from Miller Ross the security of defendants' mortgage upon the land and buildings became better, and they might be willing to run the risk of the honest application of the loan made Miller Ross to the building of the houses, while they would be unwilling to risk and to guarantee their ability to go on with the performance of the contract in other respects, such as placing the buildings and keeping them in readiness and condition for the work by plaintiff. The result shows the reasonableness of the distinction.

Miller Ross have been unable to go on with their work in furnishing lumber so that plaintiff might do his work, and it is from no fault of defendants that Miller Ross have so failed. The fact now appears that the buildings have not arrived at that stage when any further payments are due plaintiff under the contract, and consequently no breach of defendants' contract has occurred. The defendants have not guaranteed that Miller Ross should furnish the lumber. They only guaranteed they would pay certain amounts when the houses arrived at certain stages in the progress of their erection. They have not yet been thus far built. There is nothing in the language of the guaranty which imposes an obligation on defendants' part to see to it that Miller Ross will so act that plaintiff will be enabled to go on and build the houses and thus complete his contract with them. On the contrary, the guaranty is quite clearly otherwise. Nor are the defendants estopped from asserting that the conditions upon which they agreed to guarantee the payments to plaintiff have never happened. There is no question of estoppel in the case.

We think the decision made by the Special Term was correct, and its judgment dismissing the complaint should be affirmed, with costs.

All concur.

Judgment affirmed.