Colwell vs. Lawrence & Foulks

Colwell vs. Lawrence & Foulks. Where a complaint averred an assignment by an insolvent partnership firm to the plaintiff, in trust for the benefit of creditors, and the defendants on the trial admitted the execution of the assignment as averred in the complaint; Held that the defendants were precluded from afterwards raising the objection that the assignment was pot executed by all the partners. Held, also, that the objection was one which should have been made on the trial, because the want of signature of one of the partners might have been remedied by proof of bis assent to the signature of the firm, Where a contract for doing a piece of work in building a vessel, contained a stipulation for the completion of the work on or before a specified time, “ under a forfeiture of one hundred dollars per day for each and every day after the above date, until the same is completed,” Held that the sum specified was not to be deemed liquidated damages. Ths case of Gotheal v. Talmage, (6 Seld. 551,) distinguished from the present case. Where the contract is of such a character that it can- be separted, as to performance, so as to admit of an assessment of damages for a breach of one part, and not the other, the party should not, for a trifling omission, be made responsible for the whole amount of damages specified. The testimony of an expert is admissible to explain technical terms in a contract; also to explain the meaning of provisions used in a specification for building steam engines. APPEAL from a judgment entered upon the report of a' referee. The plaintiff, as assignee of the limited partnership of Berkbecks & Hodges, sued the defendants to re-recover an amount due for steam'engine work. The plaintiff’s demand was twofold: 1st. For a balance due on a contract job, and some extras connected therewith, amounting to $2064.62. 2d. For an amount of a bill for alterations and' additions, made on changing the form or construction of a plan of two engines from being disconnected, into being connected. Amount $1283.35. Total claim $3347.97. The following facts 'were found by the referee. First. That on the 28th day of May, 1857, George Birkbeck, jun., John Birkbeck and Andrew B. Hodges, and one Grahams Polly, were copartners in trade, doing business in the city of New York, as machinists and boiler makers, under a limited co-partnership under the statute, under the firm name of Birkbecks & Hodges; in which copartnership George Birkbeck, jun., John Birkbeck and Andrew B. Hodges were general partners, and said Grahams Polly was a special partner, and that on the day last aforesaid the defendants were copartners, engaged in ship and steamboat building in the city of Brooklyn, under the firm name of Lawrence & Foulks. Second. That on the day last aforesaid the defendants being engaged in building a certain steamboat, (called the General Concha,) entered into an agreement in writing in their firm name with said firm of Birkbecks & Hodges, in the words and figures following, viz: “This agreement, made at New York this 28th day of May, 1857, between Lawrence & Foulks of Brooklyn, of the first part, and Birkbecks & Hodges of the city of New York, of the second part, witnesseth: That the said Birkbecks & Hodges agree, for and in consideration of the sum of money hereinafter mentioned, to furnish the materials, build and put up complete, on board a boat to be furnished by the parties of the first part, two inclined condensing steam engines, with one boiler, and wooden water wheels, without iron rims, all as per our letter under date of May 8, 1857, and to the satisfaction of the 'parties of the first part, or other competent judges, and to have the same completed, ready for steam, on or before the 15th October next, under a forfeiture of one hundred dollars per day for each and every day after the above date, until the same is completed as above. And this last obligation of forfeiture is not to be binding on the parties of the second part, if a fire should destroy any of the parts of the machinery or hull. In consideration of the faithful performance of the above by the parties of the second part, the parties of the first part agree to pay for the same the sum of eight thousand dollars, $8000. In testimony whereof, we have hereunto set our hands at the city of Hew York, on the day and year above written. (Signed) Lawrence & Foulks.” Third. That said Birkbecks & Hodges entered upon the performance of aforesaid contract, pending which work divers alterations were made, and materials furnished, at the request of said Lawrence & Foulks, and under their agreement to pay therefor, in addition to said sum of $8000. That said work, provided for in aforesaid contract of 28th of May, and letter of 8th May, 1857, was not finished and completed by said Birkbecks & Hodges until about the middle of February, 1858. Fourth. That on or about the 26th day of December, 1857, the said Birkbecks & Hodges, and Lawrence & Foulks, adjusted the amount due the former for work up to that time done on said boat, the General Concha, at the sum of $1675.39, allowing the latter the sum of $8000 for work done upon a steamboat called the Virginia. Fifth. That there is due and owing from the defendants the further sum of $173.35, for work done and materials furnished upon and for said General Concha, after said 26th December, 1857, by said Birkbecks & Hodges. Sixth. That there is due and owing (and was so before the 25th day of September, 1858,) to the said Lawrence & Foulks by the said Birkbecks & Hodges, (over and above aforesaid $8000, allowed them on aforesaid adjustment.) the sum of $781.68. Seventh. That on about the 25th day of September, 1858, the said limited copartnership of Birkbecks & Hodges, (composed as aforesaid,) under their hands and seals, duly assigned, transferred and set over to the plaintiff, Joseph Colwell, all their partnership effects and assets—all claims, dues and demands owing them, including the said indebtedness of the defendants ; said assignment being made for the benefit of the creditors of Birkbecks & Hodges. Eighth. That by .virtue of said assignment, the plaintiff became the lawful owner and holder of the claim and demand in this action, against the defendants, and still is such owner and holder. And, as conclusions of law, the referee held and decided that the defendants were entitled to offset the said amount of $731.61, found due them, against the amount of $1676.39, and $173.35, (in the aggregate, $1849.73,) found due Birkbecks & Hodges. Ninth. That the plaintiff was entitled to recover of and from the defendants the sum of $1255.40, with costs. On the trial, Joseph Belknap, a witness for the plaintiff, testified that he was an engineer, and had been for about 25 years, and had had extensive business; was one of the firm of Cunningham, Belknap & Co. ; had 300 men in employ at once. Being shown exhibit Ho, 14, and specification .and contract in answer, he testified; “ They do not call for connecting the engines by a center shaft.” The answer was taken subject to the defendants’ objection,. that it was a question of law, Judgment being entered upon the report, the defendants appealed. John S. McCulloh, for the appellants, D. McMahon, for the respondent, [MAJORITY — By the Court, Ingraham, P. J.] By the Court, Ingraham, P. J. This action was brought by the assignee of an insolvent firm, to recover moneys due upon contracts with the firm for work, &c. The case was referred, and the referee has reported for the plaintiff. The various exceptions taken by the defendants will be noticed in the order in which they were submitted in the defendants’ points. 1st. The defendants object to the plaintiff’s title under the assignment, upon the ground that the assignment was not executed by all the'partners, Whatever force there would have been in this objection if properly presented, the defendants cannot receive any benefit from it in this action. When the assignment was offered to be proved, its execution as averred in the complaint was admitted, This admission concludes the defendants. The objection also is one which should have been made on the trial, because the want of signature of one of the defendants might have been remedied -by proof of his assent to the signature of the firm, and which was in fact proven. 2d. It is objected that there was an implied warranty that the article should be fit for the purpose contemplated; and that the defendants were entitled to recover a claim for extra charges caused by the non-performance of the assignors’ contract. There is no special finding of the referee as to this item. He allowed the defendants an offset of 0781.68. Of what this stim was composed it is not easy for us to discover; nor is it material. The evidence as to the performance of the contract by the plaintiff’s assignors, of the waiver of that performance and extension of time for performance, as well as the value and amount of the defendants’ set-off, raised questions of fact for. the decision of the referee. Even if we differed from him on such finding, the evidence is of that character to render his finding conclusive. 3d. It is objected that the damages for non-performance of the contract within the stipulated time were liquidated damages, and that the defendants were entitled to recover these damages at one hundred dollars per diem, Independent of the provision of the contract making this a forfeiture, I think the cases do hot warrant the conclusion that this amount was to be considered as liquidated damages. The case which throws most doubt upon this question is that of Cotheal v. Talmage, (5 Selden, 551;) but in that case the contract was of that particular character which could not be separated as to performance, so as to assess damages for a breach of one part and not the other. The judge said, in referring to that case, “ from the nature of the adventure, the amount of gain by a strict performance of the contract could not be foretold, and the amount of loss could not be ascertained by proof. The liquidation of the damages by contract between the parties was therefore prudent and reasonable.” Here the, contract was for doing a piece of work in building a vessel. The defect in completion might have been a hinge, or a lock, or some trifling matter which a very little expense would remedy, and consequently a very small amount of damage would be the result. To hold, under such circumstances, that this would warrant the recovery of the amount of damages named as liquidated would operate very severely, and should require a clear expression of the intent of the parties. The distinction between this and the case above referred to is, that here the damage can be easily ascertained, and should have been remedied by the defendants instead of asking for a daily penalty for the non-performance. Selden, J. says, in Cotheal v. Talmage, “ The only plausible ground for withholding the doctrine (of liquidated damages) is that the party might be made responsible for the whole amount of damages for the breach of an unimportant part of his contract, and so be made to pay a sum by way of damages grossly disproportionate to the injury sustained by the other party.” This I suppose to he the true rule as it is to be drawn from the code, and the application of this rule to the present case would sustain the finding of the referee. I am free to say that I have never been able to see the propriety of denying to the parties in any case the right to fix the amount of damages to be recovered in case of non-performance of a contract, and have always thought where the parties have agreed on a sum which they say shall be liquidated damages, that they should be held to their contract as they make it. There will now and then be an apparently hard case, but the establishment of such a rule when clearly understood, would make parties more careful in making contracts, and would relieve the courts from many gross contradictions, which now exist in the cases on this subject. We do not feel at liberty to adopt this as the rule in all cases, with the decisions before us, and must leave it to the higher court, if it should think it best, to overrule these decisions. [New York General Term, November 3, 1862. 4th. Whether or not there was an adjustment of the amount due between the parties, was a question of fact for the referee. His finding is consistent with the evidence. 5th. The same remarks apply to the alleged counter-claim for extra charges of work on “ The Virginia.” 6th. The ruling of the referee as to the conversations in regard to the Concha, prior to the written contract, was not erroneous. Those conversations were merged in the written contract. They were in no sense admissible, unless to explain some terms which could not be otherwise understood. Ho such object was avowed, and it is clear that no such reason existed to admit the testimony. 7th. The question put to Belknap was one put to an expert on a matter with which the court or jury could not be supposed to be conversant, and as such was admissible. Such evidence is admissible to explain technical terms in a contract, and also, as in this case, to explain the meaning of provisions used in a specification. My conclusion is that the referee committed no error which calls for a reversal of this judgment. Judgment affirmed, with costs. Ingraham, Leonard and Peckham, Justices.]