Clark, Executor, v. Gilbert

Clark, Executor, v. Gilbert. The compensation of an agent or servant, employed under a special contract, the complete performance of which is prevented by his sickness and death, is not confined to a quantum meruit, but is to be measured by the contract. Whether the compensation is to be reduced by an allowance in the nature of damages for a loss of profits which,, but for the agent’s death, would have accrued to the principal as a result of his further services, quaere. An agent was employed to superintend an engineer work under a contract by which he was to receive as wages one-third of the profits. He died alter a considerable portion of the work had been done, and it was completed "afterwards at a large "profit. The cáse not showing how" the profits were distributed as to'time, they áre to be deemed to have accrued •ratably iii proportion to the amount and cost of the work accomplished, and his compensation is measured by one-third of such a proportion of the whole profits as the cost of the work done at the time of his death bears to "the entire cost of the work when completed. Action commenced in 1858 to recover compensation for personal services rendered by the testator of the plaintiff for the defendant in the State of California. Prior to February, 1853, the defendant and others had made a contract with the government of the tTnited States, for the construction of a sectional floating dry dock, at Mare Island, California, and they were to have a lease and the use of said dry dock for the term of three years, for the repair of merchant vessels as well as government vessels. They were then the owners of a patent right to build a basin and railway to use in connection with said dry -dock; and they expected to enter into a contract with the government for the construction of a basin and railway at the navy yard in California, to be used in connection with the dry dock; and after-wards, on or about the first day of July, 1854, they did enter into such contract with the government. On the 8th day of February, 1853, the defendant and his associates had commenced'constructing the dry dock; and on that day, at Mew York, the defendant made "an agreement in writing, with the plaintiff’s testator (William A. Heermans), by which Heermans was to go to California and take charge ■ of the defendant’s interest (which was one-fourth), in the dry dock contract, and also his interest in all other contracts which should be made, or business in any manner connected with such contracts or works; and the defendant was to pay him a specified-salary for his services; and also one-third of all the profits that should be paid to the defendant for the aforesaid ■business, , and to make .payments to him as fast' as-the profits should be ascertained and divided, or in any way drawn from the business. In pursuance of this agreement Heermans (the testator), went to California, arriving there the 18th day of March, 1858. He thereupon took charge of the one-quarter interest of the defendant in the contracts for the construction and lease of the dry dock and in the business connected therewith; and after the making of the contract for the construction of the basin and railway, he took charge of the defendant’s interest therein; and he faithfully performed the duties required of him, according to the agreement before stated, without interruption, from the time he arrived in California, until the 1st day of April, 1856; and he faithfully performed all such duties until his death, except so far as he was prevented by sickness. About the 1st day of April, 1856, he became sick and in consequence was absent from the business until the 1st day of July, 1856, and thereafter he gave but little attention to the business, except looking over the books, accounts and balance sheets, until the 27th day of July, 1856, when he died, The contract for the construction of the dry dock was performed, and the dry dock was finished prior to April, 1856, and at that time the materials for the construction of the basin and railway had been purchased, and mostly delivered, and about half of the work of constructing the same remained to be performed. On the 27th day of July, 1856, there remained to be done, and used to complete the work, about $17,500 in value of labor and material. The basin and railway were completed in September, 1856, and accepted by the Government, in November of that year. The dry dock was completed in 1854, and occupancy thereof by the defendant and his associates terminated November 5, 1856. The dock was put in operation in 1858. The defendant and his associates received from the United States Government $1,450,000 for constructing the dry-dock basin and railway. The defendant received $84,920.90 for his share of the profits of constructing the basin and railway. Neither Heermans nor- the plaintiff, as his executor, received any portion of those profits, one-third of which the plaintiff endeavored to recover in this action. Heermans was paid $8,416.71. The action was twice tried before a referee. On the first trial the referee decided that the plaintiff was entitled to recover $28,449.66. He’ then ascertained the compensation to which Heermans was entitled from the contract the defendant made with him. On the last trial he decided that the value of the services rendered by Heermans, under the contract with the defendant, was the sum of only $300, over and above what he had been paid; “ such value being ascertained without reference to said contract or profits, and independent thereof.” And he held that neither the contract between the defendant and Heermans, nor the amount of profits received by the defendant, could be taken into consideration in fixing the sum which the plaintiff was entitled to recover. To these conclusions the plaintiff’s counsel excepted. The judgment entered on the first decision of the referee was reversed, and a new trial granted, at a general term of the Supreme Court in the first district. (32 Barb., 576.) The judgment entered on the last decision of the referee was affirmed at a general term of the” Supreme Court in the district; and the plaintiff appealed to this court. John H. Reynolds, for the appellant. George F. Comstock, for the respondent. [MAJORITY — Balcom, J. Selden, J.,] Balcom, J. This court decided, in Wolfe v. Howes (20 N. Y., 197), that, where a person is prevented by sickness or. death from felly performing a contract for his personal' services, which he has partially performed, compensation may be recovered for the services actually rendered by him under the contract. That decision shows that the plaintiff, as executor, may recover, in this case, compensation for the services his testator rendered for the defendant, although he was prevented by sickness and death from performing all he was to render according to the agreement between them: also, that the agreement is “of consequence” in measuring or regulating the compensation to which the plaintiff is entitled. The latter conclusion is irresistible, for the reason that the agreement was not rescinded by the death of the testator, but remained in force, so far as to show his employment by the defendant and the value of the services rendered under it. Besides, it would be palpably unjust to disregard the stipulated value of the testator’s services, for it is evident that he was employed in consequence of his integrity and capacity for the services required; and to allow the defendant now to reduce the value of such services by proof of the sum for which he could have employed another person to perform the same services, in whom he might or might not have had confidence, would enable him, according to the first decision of the referee, to gain more than $20,000 by the testator’s death. The. question whether a servant, who has not fully performed his contract, is, prima facie, entitled to recover the stipulated value of the services actually rendered, when disabled by sickness from serving the full term agreed upon, was not properly before the Supreme Court in Fahy v. North (19 Barbour, 341). The servant, in that case, recovered fifty Srits per month less than his employer was ■ to pay him, cording to the agreement between them, but he did not opeal from the judgment; his employer was the'appellant, ,d the only material question determined on the appeal was, whether the sickness of the 'servant was an excuse for his not working the length of time agreed upon; and the court held it was. There is -no case which holds that where the full performance of a contract for personal services is prevented by the sickness or death of the party, who was to render the services, a greater compensation can be recovered than the stipulated-value, on pfoof that, the services were worth more than such value. But there are decisions, that the recovery in» such a case cannot exceed the contract price, or the rate of it for the part of the service performed. (Cole v. Smith, 4 Ind., 79; Allen v. McKibbin, 5 Mich., 449.) The doctrine was asserted in Allen v. McKibbin, that the servant cannot be permitted to gain by his sickness, nor can the employer be permitted to lose by it. The Supreme Court of Vermont held in Patrick v. Putnam (27 Vt., 759), that a person contracting to labor for a definite term, who fails to fulfill his contract by reason of sickness, is liable to have the amount of his recovery reduced from the contract price, by the damages sustained by his employer, in consequence of Ms not being able to complete the full term of service. This rule is equitable; and it should be applied to such cases, although the servant is not to be regarded as violating Ms contract, in consequence of Ms inability fully to. perform it, by reason of Ms sickness or death. His failure fully to perform his contract, for such a cause, is Ms misfortune aad not Ms fault; and his employer should neither gain nor lose by it. This rule is just to the servant as well as the employer; and it should have been applied to this case. Much more might be said in favor of this rule, but it needs no vindication; it is so well grounded in good sense it sufficiently commends itself. It may be said to be a common sense rule, and common sense is the basis of all just law. This rule does not conflict with the decision of this court in Jones v. Judd (4 Comst., 412). In that case the defendant had a contract with the state to complete certain sections on the Genesee Valley canal, and he sublet a part of the work to the plaintiffs at a certain stipulated price per yard for excavation, and a certain other stipulated price per yard for embankment. After the plaintiffs had done a portion of the easiest work on their job, the state, by a legislative act, stopped the work; and this court, by an equally divided vote, affirmed a judgment by which the plaintiffs had recovered the stipulated prices per yard for what earth they had excavated and embankments they had made. « The plaintiffs in that case were not in default' at all; and although the defendant was not blamable for the stoppages of the work, he had his remedy against the State for all damages he sustained by reason of the" stoppage. That case, therefore, is clearly distinguishable from this. By applying the rule to this case, that the servant, when prevented by sickness or death from fully performing a contract for his personal services, may recover compensation for the services performed, at the rate specified in the contract, subject to the right of the employer to reduce the same, by proofof the damages, if any, sustained by him in consequence of the servant not being able to complete the stipulated term of service, justice would be done to both parties, and the plaintiff would recover one-third of the profits earned, at the time of the testator’s death, on the contracts the defendant and his associates had with the government of the United States, not only for constructing the dry dock and the lease of it, but also the basin and railway, after deducting the damages, if any, the defendant sustained in consequence of the sickness and death of the testator, prior to the completion of the work. The first decision of the referee shows that the compensation of the testator can be ascertained from the evidence, according to the measure fixed by the contract. It is no objection to the rule above stated, that at the time the testator died, the profits earned upon the contracts the defendant and his associates had with the United States Government, could not have been ascertained; and that if the action had then been brought and tried, it would have been impossible to measure the testator’s compensation for services in the manner specified in the agreement under which they were performed. If the plaintiff had then brought his action, and failed to recover the proper compensation, because it was impossible for him then to make the requisite proofs, he would have been beaten, as any other person is when he fails to obtain justice for the want-of legal evidence to establish his case. The plaintiff acted wisely, and waited until he could legally and properly prove his case, before bringing his action. But it is unnecessary to determine whether the plaintiff could have brought this action immediately after the testator died, or was obliged to wait until the dry dock, basin and raibvay were completed and paid for by the United States before Bringing it; and I will not express an opinion upon the question. The cases relied on by the Supreme Court, to support the position that the agreement under which the services were performed, could not be resorted to, for measuring the compensation therefor, because the same could not be ascertained by “ arithmetical calculation,” arose in actions to recover compensation for services performed under agreements void by the statute of frauds; and are inapplicable to a case where the services were performed, as in this, under a valid contract. The foregoing views lead to the conclusion, that the referee erred, on the last trial, -in ascertaining, the value of the testator’s services without reference to the agreement under which they were performed, or. the profits the defendant made and received upon the contracts he and his associates had with the Government of the United States, for constructing the dry dock, basin and railway, and the lease of the dry dock. The judgment of the Supreme Court should be reversed, and a new trial granted, costs to abide the event. Some of the judges dissented from the idea that the agent, not being in fault in dying, could be treated as liable to damages to compensate the principal for a reduction of the profits in the further prosecution of the work, arising from the loss of the agent’s services. The case did not show what loss, if any, was sustained by the defendant from this cause, but showed a profit upon the work as a whole. It was thought that,.in the absence of evidence, the profits should be regarded as distributed ratably throughout the work, and as divisible, not in proportion to time, but to the amount of work performed and material furnished. The result of the discussion was this: Selden, J., did not sit in the case; all the other judges were for reversal; and all of them, except Rosekranb and Balcom, Js., concurred in this rule, propounded by Marvin", J., for measuring the plaintiff’s damages V'The testator’s compensation is to be ascertained by taking one-third of such a proportion of the whole profits earned and received by the defendant as the amount and cost of the work done at the I time of the. testator’s death bears to the entire cost of-the work when completed. Judgment reversed, and new trial ordered.