Opinion
Argued December 6, 1888
Decided January 22, 1889
R.E. Andrews for appellant. E. Countryman for respondent.
We are of opinion that the compromise and settlement made by the parties on the 4th day of April, 1881, furnish a defense to this action. It was held in the courts below that the compromise did not cover or embrace the claim upon which the plaintiff has recovered. We think it did. While the precise scope of the compromise agreement may not be entirely certain, it is our duty, interpreting all its language in the light of the surrounding circumstances, to give it that construction which is sustained by the best reasons and the greatest probabilities. It must be born in mind that from the beginning there was a very sharp controversy and dispute between some of the trustees of the defendant and Parr as to the validity of the contract of December, 1870, and the manner of its performance. The defendant finally refused to pay for the work performed under the resolution and also under the contract, and when Parr brought suit to recover the amount claimed by him it was vigorously contested for several years. It was decided in this court that he could not recover for the grading done and gravel and sand furnished under the resolution of the board of trustees adopted in September, 1873. Nevertheless he persisted in his claim to recover those items upon the subsequent trial before the referee. And while the referee decided that he was not entitled to recover for them, he reported in his favor for the amount claimed by him under the contract of December, 1870. The defendant had evinced a determination to continue the litigation by its appeal to the General Term. In attempting a compromise and settlement at that stage, is it not probable that the parties would seek and intend to include in such settlement the entire controversy between them, and if they had not so intended that they would have embraced in the agreement some exception or reservation? It is not supposable that the defendant would have been willing to make the compromise and leave itself exposed to still further litigation upon the claim made in this action. There is, indeed, every probability that the parties would intend to embrace in their compromise and settlement the whole litigation and dispute between them concerning the entire work done by Parr for the village in connection with the sidewalk. It was that litigation and that dispute which they compromised and settled. It appears from the agreement that the Boston and Albany Railroad Company, which was in some way interested in the result of the litigation as owner of land liable to be assessed for the work, had paid its share and proportion, and the only reasonable presumption is that payment by it was induced by the belief that the sum paid was its full share of the entire claim of Parr for work done and materials furnished. The amount paid by the defendant upon the compromise settlement is not of much significance in construing the agreement. It had not only resisted payment for the sand, gravel and grading, but also for the work done under the contract. And hence it appears that it refused even to pay the full amount of the judgment which had been entered against it. But whatever was paid was in settlement of the suit and litigation, and, in order to determine what was embraced in the suit and litigation, it is necessary to read the complaint. Suppose this compromise agreement had been made before any action had been commenced by Parr, and it had recited that it was in settlement and compromise of all Parr's claims for materials furnished and work done for the defendant, and a sum less than the amount claimed had been paid to and accepted by Parr under that compromise and agreement, would not the amount so paid and received have been applied upon all his claims? Again, suppose this precise agreement had been made while the case was still pending undecided before the referee, could it have been successfully claimed that the agreement and compromise did not embrace all the matters in dispute between the parties? We think not, and that for precisely the same reasons the compromise and settlement after judgment must apply to everything embraced in the judgment, not only, but, also, to everything embraced in the litigation and suit. The language should be so construed as to give effect to the presumed intention of the parties. It makes no difference that the claim now made is for the liquidated damages on account of the breach of the contract. If the plaintiff has received compensation for the work and materials which he furnished in order to enable him to perform his written contract, he cannot now recover damages of the defendant because it did not furnish the materials and perform the work.
We are, therefore, constrained to differ with the courts below in their construction of the compromise agreement, and to hold that it furnishes a defense to this action.
But if we assume that the compromise agreement does not furnish a defense to the action, there is still another ground for holding that the action cannot be maintained. The plaintiff, standing upon the contract of December, 1870, could not put the defendant in default except by showing a readiness and willingness to perform his part of the contract, and demanding performance on the part of the defendant. There is no evidence whatever in the record showing that the plaintiff requested the defendant to perform its part of the contract, or that it refused to do so. Therefore, in September, 1873, when the resolution was adopted which authorized the plaintiff to furnish the sand and gravel and do the grading, he had no cause of action against defendant to recover damages for breach of the contract on its part. If, however, the defendant had absolutely refused to furnish the gravel and sand, and do the grading, its refusal alone would not have authorized the plaintiff to furnish the materials and do the work. Ordinarily, when one party to a contract refuses to perform, that alone does not authorize the other party to go on with the contract and perform for the defaulting party. If A contracts with B to do the labor requisite for the construction of a house upon A's land, who is to furnish the materials for that purpose, and A refuses to furnish the materials so that B can do the work, B is not thereby authorized to furnish the materials himself, and go on and complete his contract. Without A's consent B has no authority to enter upon his land, and B's only remedy is an action for damages for breach of the contract by A. So here, if the defendant refused to furnish the sand and gravel, and do the grading, and thus perform its covenants, the plaintiff had no right to enter upon the street, and do the work and furnish the materials at the expense of the defendant. His only remedy was to stop there and bring an action for damages against the defendant for its breach of the contract.
There are cases where one party to a contract may furnish the work and the materials which the other party is bound to furnish, and omits, upon request, to furnish, and where he may recover the expenses of furnishing them, as damages for a breach of the contract by such other party. It is difficult, if not impossible, to define those cases by any general rule. It is sufficient to say that this is not one of them. Those cases are, generally, where one party to a contract has entered upon the performance thereof, and the other party omits, upon request, to do something of no great importance, to be thereafter performed before further progress can be made with the contract, and then the party anxious to perform does the work or furnishes the material which the other party ought to have done or furnished; and, in such case, he may recover the expense of the work done and materials furnished, as damages for a breach of the contract by the other party. Where the lessor has covenanted to repair, and the lessee enters into possession, and repairs thereafter become necessary, which the lessor refuses to make, the lessee may make them and recover the expenses of them, as damages for breach of the lessor's contract. But the cases must be very rare, if, indeed, there are any, where one party refuses to perform a condition precedent which stands in the way of any performance by the other party, and the latter party can nevertheless, perform the condition and recover the expense of such performance, as damages for a breach of the contract by the other party. The law, in such cases, recognizes the right and power of one party to defeat performance of the contract by the other party, and leaves him responsible for the damages he thus causes the other party, which damages are usually measured by the value to him of the contract thus practically destroyed. In other words, a party may repudiate or break a contract, while he cannot deny or destroy its obligations. ( Lord v. Thomas, 64 N.Y. 107. )
Therefore, in furnishing the materials and doing the grading, the plaintiff did nothing which he was authorized to do by virtue of his contract. But he alleges in his complaint that he did the work and furnished the materials at the request of the defendant, and the trial judge found that he did so in pursuance of and under the resolution of September, 1873, and that the passage of that resolution and the performance of the work and the furnishing of the materials by the plaintiff under and in pursuance of the resolution, was an abandonment by mutual consent of that portion of the contract of December, 1870, which required the defendant to do the grading and to furnish the sand and gravel, and was, in effect, an attempted alteration of the contract whereby the defendant was relieved from doing the work and furnishing the sand and gravel. In view of the allegations of the complaint and the findings of the trial judge, amply supported by the evidence, how can it be said that there was any breach of the contract on the part of the defendant? If it had requested some third party to furnish the materials and do the grading, even under an illegal contract which did not bind it, yet the materials having been furnished and the work done, he could not have alleged that it had broken its contract. Here, performance by the plaintiff was substituted in the place of performance by the defendant. He furnished the sand and gravel and did the grading upon its request, and how and upon what theory can he now claim a breach of contract on its part? The materials were furnished and the work was done under a contract between him and it, and that was assented to by him in lieu of performance by it. The only remedy thereafter left to him was an action to recover, if he could, for the materials furnished and the work done under the implied contract. If it turned out that his contract was illegal, and was not binding upon the village, he was in the same position that any other person would occupy who had done work and furnished materials for the defendant under an illegal and void contract. The fact that he could not recover upon his contract of September, 1873, furnishes no reason for holding that he can recover for breach of his contract of December, 1870. The latter contract was not broken by the defendant. It simply caused that to be performed by the plaintiff. The limitations in defendant's charter would be of little use if a party doing work for it under an illegal and void contract could still recover for the value of his work upon the theory of a breach of contract.
Therefore, in no aspect of this case as it now appears, did the plaintiff have a cause of action against the defendant to recover damages for a breach of contract.
The judgment should therefore, be reversed, and a new trial granted.
I think it proper to explain my dissent from the conclusions reached by a majority of the court, by stating the grounds. I do not think that the instrument, expressing the agreement of the parties to compromise, can be construed to cover the subject-matter of the present action.
The question presented is, what was settled by the terms of that agreement? Not all claims and demands which the plaintiff might have against the village of Greenbush; for the instrument does not use such broad language. The action then pending was to recover for the debt for the work done and materials furnished, and, as to the sand and gravel for which he claimed therein, he was defeated; for this court had decided that the resolution was illegal, on which plaintiff rested his right of recovery. The penal clause in the original contract, however, gave him a cause of action on a new and independent ground, on which he was able to place himself.
This agreement of compromise might, by the use of ordinary and usual words and phrases, have precluded any chance of plaintiff availing himself of other causes of actions, or demands, or claims; but the parties have not accomplished any such result. They covered the "pending suit," and, by the word "litigation," they must be held to have intended what that word simply and ordinarily means, namely, the act of litigating, or a judicial contest. Such a meaning cannot be extended in reason, and precludes the idea that other causes of action were composed by the agreement, than what were then the subject of a judicial contest.
Nor am I able to agree in the second ground of Judge EARL'S opinion. The resolution of 1873 was illegally passed and there was no basis for a recovery against the village for the work done. But the defendant was in default for the non-performance of its agreement under the original ordinance, and it is estopped from now saying, after it has suffered the defendant to go on and do what it had itself undertaken to do, that he cannot recover on the penal clause of their agreement, for want, on his part, of an offer to perform, or a demand that it perform.
All concur with EARL, J., except GRAY, J., dissenting, and PECKHAM, J., not sitting; ANDREWS, J., concurring on first ground.
Judgment reversed.