Dubinsky v. Wells Bros.

218 Mass. 232 | Mass. | 1914

Crosby, J.

The defendant in this suit in equity was the general contractor for the erection of the Filene Building in Boston, its contract including the demolition and removal of the old buildings on the site of the new one. The case was referred to a master, who found that by the terms of the contract with the owners it was provided that if the architect was dissatisfied with the manner in which the work was being performed by the defendant, he (the architect) “could take away the contract from Wells Brothers on three days’ notice, and place it elsewhere.” The defendant entered into a contract with the plaintiff, by the terms of which the defendant sold and conveyed the materials in the old buildings to the plaintiff, the latter agreeing to remove them, together with all rubbish, within twenty-five week days from October 3, 1911, which time for the completion of the work was by a supplemental agreement extended to November 23,1911. The agreement provided that upon the failure of the plaintiff “to prosecute the work satisfactorily to the architects and the party of the first part” (the defendant), the buildings and material therein should revert to the defendant.

The plaintiff entered upon the work, and after repeated complaints made to him by the defendant and by the architects between November 1 and November 9, the defendant on November 7 wrote to the plaintiff that it (the defendant) had received notice that the work was not proceeding satisfactorily according to the contract and that, if the accumulation of rubbish and debris was not removed from the premises within forty-eight hours, the defendant would take possession of the property, finish the plaintiff’s contract and charge him with the expense thereof. On November 9 the defendant by letter notified the plaintiff that in accordance with its letter of the seventh “we are herewith taking possession of the buildings on Washington, Summer and Hawley Streets, on the site of the new Filene Building.” The letter also requested the plaintiff to remove his employees and vacate the premises forthwith.

The master filed a report and a supplemental report, both of which were confirmed; a final decree was entered and both plaintiff and defendant have appealed from this decree.

It is apparent from the nature of the work to be performed by the plaintiff that it was of great importance to the defendant as the general contractor that the demolition of the old buildings and the removal of the materials should proceed without delay and be completed within the time limited by the contract. The master finds that both the defendant and the architect were dissatisfied with the manner in which the plaintiff was carrying on the work; that it was not being prosecuted expeditiously; that the plaintiff permitted a substantial quantity of materials and rubbish to accumulate on the premises; that the plaintiff’s method of wrecking the building was not the most efficient or proper method of doing the work; that the plaintiff refused to change the location of a derrick which interfered with the prosecution of the work by the defendant; that dust was raised on the premises by reason of insufficient watering and was the subject of complaint by the police department; and that too many teams were allowed to stand on the streets adjoining the premises. These and many other matters were the subject of complaints made by the defendant and the architect to the plaintiff, which finally resulted in the defendant’s taking possession of the premises and completing the work. The master finds that if the plaintiff had not been ejected, he could have completed his contract by November 23. He further finds that whether the plaintiff would have done so could not possibly have been known as early as November 9, 1911. The master also finds that the complaints made by the architect and by the defendant to the plaintiff were made repeatedly and were made in good faith.

The plaintiff contends that the defendant was not justified in terminating the contract and taking possession of the premises, and that therefore the materials did not revert to the defendant. The determination of this question depends upon the extent of the authority of the defendant under the contract.

We are of opinion that in view of the terms of the contract it was within the power of the defendant not only to determine whether the work was being performed in accordance with the contract, but that it might direct the maimer of such performance. If it was dissatisfied with the progress of the work or with the way in which it was being carried on, it was the duty of the plaintiff upon notice from the defendant to conform to the latter’s orders in directing the work; and so long as the defendant acted reasonably and in good faith under an honest sense of dissatisfaction, the plaintiff was bound by its decision. Fullam v. Wright & Colton Wire Cloth Co. 196 Mass. 474. National Contracting Co. v. Commonwealth, 183 Mass. 89, 95. Stadhard v. Lee, 32 L. J. (N. S.) 75, 78. Roberts v. Bury Improvement Commissioners, L. R. 5 C. P. 310, 318.

The master’s finding, that by the exercise of due care the defendant could have completed the wrecking and removal of materials without expense to it, is equivalent to a finding that the defendant did not sustain any substantial loss by reason of the breach of the contract by the plaintiff. In view of this finding, the defendant is entitled to recover only nominal damages. As the evidence is not reported, we cannot say that the master’s finding in this respect is clearly wrong.

The two exceptions taken by the defendant to the refusal of the master to rule as requested upon the degree of care necessary to be exercised by it in wrecking the buildings after it had terminated the contract with the plaintiff, cannot be sustained. They could not have been given in the form presented, but were fully covered by the ruling made by the master upon the first of the defendant’s requests for rulings.^*

The only other question to be determined is whether the $1,500 deposited by the plaintiff is to be regarded as in the nature of a penalty or as liquidated damages. The first paragraph of the agreement recites “That the party of the first part [the defendant] receive a certified check for the sum of fifteen hundred dollars ($1,500) upon the signing of this agreement, which amount is to be forfeited in case the other conditions of the contract are not satisfactorily carried out by the party of the second part [the plaintiff].”

We are of opinion that this deposit was intended by the parties to secure the performance of the contract and was not to be retained by the defendant as liquidated damages for the breach of the contract by the plaintiff.

As only nominal damages assessed in the sum of $5 have been sustained by the defendant, the sum of $1,495 should be returned to the plaintiff, with interest in accordance with the decree.

The interlocutory and final decrees must be affirmed.

Ordered accordingly.

* The ruling referred to as made by the master was “that the degree of care required of the defendant in wrecking the buildings after November 9, 1911, was such care as men of ordinary prudence would have used under the same circumstances and having regard to the matter in which the defendant was engaged.”