201 A.D. 820 | N.Y. App. Div. | 1922
The appellant alleges in its answer that the plaintiff during the performance of the contract paid to the contractor considerable sums in excess of the amounts due it and in violation of the rights of the appellant thereby discharging the latter from its obligations under its bond. There is no allegation in the answer that in any other particular the plaintiff varied or modified the terms of the contract or so conducted itself or dealt with the contractor as to prejudice the rights of the appellant as a surety. It is true that the plaintiff from time to time advanced moneys to the contractor in excess of ninety per cent of the engineer’s estimates theretofore made but nearly all of these advanced payments were absorbed in the subsequent estimates. None of the advancements not thus paid out of subsequent estimates have been charged to the appellant or taken into account by the referee in arriving at his conclusion in respect to damages. It appears that on July 25, 1918, before the plaintiff had any information that the contractor would make default in its contract, there was advanced to the latter $2,500 which was not deducted from any estimate but for which no claim was made by the village and was not allowed against the appellant by the referee. The appellant contends, however, that the effect of these advanced payments was to discharge the surety because they constituted an inducement to the contractor to abandon the contract or removed from the latter an incentive to complete the same. It has been held in some jurisdictions that advanced
I think, however, the appellant is not liable for liquidated damages. In the first place, it appears without contradiction that the parties mutually agreed to a change in the location of the pipe line which had the effect of delaying the progress of the work at least two months. In Mosler Safe Co. v. Maiden Lane Safe Deposit Co. (199 N. Y. 479) the syllabus is as follows: “ Where the parties are mutually responsible for the delays, because of which the date fixed by the contract for completion is passed, the obligation for liquidated damages is annulled and, in the absence of some provision under which another date can be substituted, it cannot be revived. If the plaintiff failed to complete within a reasonable time after crediting the defendant’s delays, then the latter had a cause of action for the former’s neglect and the measure of damages would be the actual loss proved to haye been sustained.” It is not necessary, however, to rely on that principle. The authorities quite uniformly hold as far as I am advised that a provision for liquidated damages in a building contract such as we are here considering should be construed as applying only to delayed and not to abandoned performance. (Murphy v. United States Fidelity Co., 100 App. Div. 93; affd., 184 N. Y. 543; Brady v. Mayor, etc., 44 Hun, 511; Crawford v. Becker, 13 id. 375; Murphy v. Buckman, 66 N. Y. 297; Buhler Co. v. New
Attention is also called to the following provision in the bond: “ And if said obligee shall complete or relet the said contract, then any forfeitures provided in said contract against the principal
The judgment as to the appellant should be reversed and a new trial granted, with costs to the appellant to abide the event, unless the plaintiff stipulates to reduce the damages as to the appellant to $7,202.90, with interest, and to reduce the additional allowance granted to $400, in which event the judgment should be modified accordingly and as so modified affirmed, without costs of appeal.
Judgment as to the appellant reversed and a new trial granted, with costs to the appellant to abide the event, unless the plaintiff stipulates to reduce the damages as to the appellant to $7,202.90, with interest, and to reduce the additional allowance granted to $400, in which event the judgment is modified accordingly and as so modified unanimously affirmed, without costs of the appeal.