Opinion
March 8, 1911.
John J. Sullivan, Daniel J. Kenefick and Howard S. Jones, for the appellant.
Shire Jellinek and Vernon Cole, for the respondent.
The judgment and order should be reversed and a new trial granted, with costs to appellant to abide event.
The action was brought to recover the balance unpaid upon a contract to construct on defendant's premises a refrigerating plant and extra machinery connected therewith. The price of the plant was $8,732, to be paid one-third by three months' note when the machinery was delivered, another one-third in cash when the plant was completed, and the remaining one-third by a three months' note to be given at the time of such completion, which defendant might renew. The first note was given and paid, but the cash was not paid nor the last note given. The balance unpaid was, therefore, about $5,822, and there was extra machinery furnished, $53.10, making the total claim $5,875.10, besides interest. The verdict was directed for $6,218.65. It was agreed plaintiff should construct and deliver the plant in accordance with the specification annexed to the contract, ready to do work on or before March 1, 1909, and if it did not accomplish the results guaranteed in the specifications by reason of oversight or defect in construction a reasonable time should be allowed plaintiff in which to accomplish said results, and when said specified results should have been accomplished, the defendant should accept the apparatus as complete and such acceptance should be final; but if plaintiff should fail to accomplish the results specified within ninety days after the time for the commencement of its operation, then no payments should be considered due and payable thereon, and the plaintiff should refund any amounts that might have been paid or advanced and should remove the apparatus from the premises where erected. And it was further agreed the apparatus should be and remain plaintiff's property until fully paid for, and that in case of disagreement between the parties there should be an arbitration, the decision on which should be final. The specifications contained a guaranty by plaintiff that the apparatus should have a capacity when in full operation to make twelve and one-half tons of raw-water ice per day of twenty-four hours in midsummer, when properly operated and run continuously, and that it should be capable of refrigerating equal to the melting of thirty tons of ice every twenty-four hours of continuous operation, if kept in good order and properly handled, and the temperature of the condensing water was not above seventy degrees Fahrenheit. The specifications provided that the defendant would properly insulate and furnish wood curbing for freezing tank and foundations and tank floor, that the defendant would furnish foundations of plant and foundation for machine, pumps or any part of the plant requiring one, constructed in the best manner of first-class material, placed on a solid bottom, and any damage sustained by the plaintiff in setting up the work caused by imperfectly-constructed foundations should be charged to defendant, and he should provide platform for brine tank and ammonia condenser. The defendant claimed that the plaintiff failed to accomplish the results under the contract and specifications and to put the plant in condition to accomplish such results and demanded that the $2,910 paid on the contract be returned, and he alleged damages in the sum of $10,000. On demand a bill of particulars of such damages was furnished. At the close of the evidence the court held that there was an acceptance of the plant, and the defendant must pay the balance of the purchase price and for extras, less any damages suffered by reason of breach of guaranty; that the measure of damages was the difference between the value of the plant as it was guaranteed and as it was, and that no evidence had been given on that theory. Therefore the verdict was directed as already indicated, without any allowance for damages. I think it must be said that there was evidence making it a question for the jury whether or not the plant fulfilled the terms of the guaranties. It was a question for the jury also whether such failure was due to the fault of the plaintiff or of the defendant. But the plaintiff claims these questions were of no consequence because the defendant, with full knowledge of all defects, accepted and used the plant and did not offer to return the same. The action was one at law; therefore, the rights of the parties were to be determined as of the time the action was commenced. The machinery was installed June 21, 1909. It did not operate satisfactorily. The plaintiff had ninety days under the contract to remedy defects, which would expire September 21, 1909. Eight days after that the action was begun. During that ninety-day period a test was made for twenty-one days. This test was not satisfactory; the hardening room could not be used and the bunker room leaked. The twenty-one-day test closed in July. Further efforts beyond that time were made to remedy the defects in the plant and building by both parties. The plant had to be run during the ninety-day period to see if the defects were cured. It was run it seems for the eight days thereafter before the action was begun. I do not find in the evidence that the plant was ever made so as to comply with the guaranties, or that there was any talk about an acceptance of the plant as it was, or about its being removed from the premises by the plaintiff. The court could not hold as matter of law that there was an express acceptance by the defendant of the plant. It must have found a constructive acceptance, and that alone from the use of the plant for the eight days just prior to the commencement of the action. This was error. It was at most a question for the jury and should have been left to them, especially as the defendant by this finding was deprived of his defense that the guaranties were not complied with and, therefore, he not only could not be compelled to pay the balance of the contract price, but was entitled to have the plaintiff remove the plant from his premises and pay back the money already advanced. There was no evidence that the defendant ever conceded the plant was constructed in compliance with the contract and the guaranties. He was always claiming it was not, and refused to pay the balance of the contract price. The complaint does not seem to allege acceptance in express words, but merely that there was a sale and delivery. The ordinary rules in cases of the sale of personal property as to return or acceptance of the property, are not applicable here. This plant was to be put in defendant's building, was to remain plaintiff's property till paid for, plaintiff was to have an opportunity to correct defects for ninety days after the operation thereof was commenced. If then it was all right, defendant was to accept and pay for it and his acceptance was to be final. If it was not right, the plaintiff was to take it away and repay defendant whatever he had paid on the purchase price, etc. The plant was there in operation during the ninety-day period. The defendant could not require it to be removed. Its business had to be carried on in the building after the ninety days expired. What was the defendant to do? There seemed to be a waiting for a few days, to conclude what should be done, what could be done if anything. The plant was not satisfactory. The jury might have so found. The parties, so far as the evidence discloses, did not talk or correspond about it for the few days intervening, and then this action was begun, and reliance is placed not upon a compliance with the contract by the furnishing of a satisfactory plant, one in accordance with the contract and guaranties, but upon the technical claim that defendant by using the part of the plant he did for the few days accepted the whole plant, and such acceptance was final. The question might have been submitted to the jury, and if a finding had been made favorable to the plaintiff, it very likely would have stood, but I cannot assent to the proposition that the limited use of the plant for a few days after the ninety-day period had expired was as matter of law an acceptance of the plant. The use under the circumstances of this case for the eight days should not be held to operate as acceptance so as to cut off all defenses based upon failure to furnish the plant agreed upon, that would insure the results guaranteed.
All concurred.
Judgment and order reversed and new trial ordered, with costs to appellant to abide event.