83 N.Y. 391 | NY | 1881
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We think that the building contract and the agreement as to the trust fund are, by the acts of the parties, to be read as one contract. Then, as far as involved in this case, it was a contract by the McCormicks, to take a deed of the premises, to give back mortgages to the plaintiff, to build four houses on the lots, and to leave $3,000 on deposit at the trust company as a collateral security for the performance by them of the contract. The plaintiff agreed that his mortgages should be next in lien after the Grannis mortgage, and that he would make some advances. He has kept his agreement. The McCormicks have not completed the houses, and have failed to perform their agreement. The plaintiff has a right to resort to his collateral security, the fund; and the question is, how much of it is he entitled to, as against the McCormicks? Clearly he is entitled to have from the McCormicks as much as will put him in as good plight as he would have been had the houses been finished. His damages are the difference in the value of the premises, as they were with the houses unfinished, on the 1st September, 1877, from what the value of them would have been, had the houses been finished on that day according to the contract. Laraway v. Perkins (
The plaintiff was entitled on the 1st of September, 1877, that there should be finished houses, rentable, and so, productive of income with which to keep down interest on the mortgages on the lots, the taxes thereon, and insurance premiums. He could not, on that day, had he been let into immediate possession and control, by any expenditure of money or energy, have completed them at once; nor, in the nature of things, could he have supplied the lack of the completed houses by a purchase in the market. The work needed to complete was one of time; and while the time was running, interest was running also, taxes were levied, insurance was to be kept up, and the premises were yielding no rent. It is plain that to repay him just what he expended to finish the buildings would not make him whole; for he had to pay, besides the cost of building, interest to Granniss, and lose interest on his own mortgages, and pay taxes and premiums. To put him in as good predicament as he would have been had the buildings been done on the 1st of September, 1877, he should have the difference in value between the buildings thrown on his hands unfinished, and the houses as they would have been if completed according to the contract. This seems to us the rule that will give him full compensation.
The appellants claim that the trust fund was not a collateral to the plaintiff's mortgages. It is true that it was not made so in direct terms, but it was collateral that the houses would be built; and as that could not be without helping the security of the plaintiff's mortgages indirectly, the trust fund operated as collateral to the mortgages. The plaintiff gave up his right to have no greater incumbrance on the lots, before his own, than to an amount named. He permitted a larger amount to precede him, but he did so on the consideration that $3,000 should be kept on deposit as a security that the houses be built, and to be paid to him when they were finished. He was, to be sure, to make advances for the building, but those advances expended on the premises made his mortgage security more valuable; and when the $3,000 would be paid *399 him he would reimburse himself; which makes his conduct wise and consistent in applying the first $3,000 to liquidate former advances.
We see no question of election of remedies in the case, as that question is presented by the appellants. The plaintiff had a right to enforce every agreement that he held according to its terms. His bonds he could sue and get personal judgments. His mortgages he could foreclose, if executions on those judgments were not satisfied. His claim upon the deposit he could enforce, as that deposit, in effect, stood for so much mortgage security that he had given up to Grannis for the appellants' benefit. And here is the essence of this arrangement for the deposit. The plaintiff relinquishes so much of his mortgage security, on $3,000 being put aside in place of it, for him ultimately. It mattered not to him that he made advances to the McCormicks, if the money was laid out on the lots. It was returned to him in enhancement of his mortgage value, and he would obtain repayment from the $3,000 at the end.
Nor is there room for a question of the rescission of the building contract by the plaintiff. The defendants abandoned the contract. It was the duty and the interest of the plaintiff to mitigate the damages therefrom as much as he could. To that end he took possession of the work and finished it to availability. His act in foreclosing the mortgages was justifiable. There had been a default. He need not in his action therefor, and in the judgment, reserve the building contract; the defendants had abandoned it, and it would have been a useless form to have done so.
Nor is the point tenable that the plaintiff cannot recover for expenditures made after his foreclosure sale, for that it was made on his own land. Expenditure needful to bring up the value of the buildings is part of the damage he had sustained, before the foreclosure, by the failure of the defendants to add so much to the value of the land as they agreed to do.
The judgment should be affirmed.
All concur.
Judgment affirmed. *400