Story et al. v. New York and Harlem Railroad Company

Story et al. v. New York and Harlem Railroad Company. Measu/re of Damages. — Practice on Appeal. In an action to recover damages for preventing the plaintiff from performing his contract with the defendant, the profits which the former would have made on his sub-contracts, do not constitute the proper measure of damages ; such evidence is not competent upon that question. A judgment cannot be affirmed in part and reversed as to the residue, where a new trial is awarded as to the latter part of it. New York and Harlem Railroad Co. v. Story, 6 Barb. 419, reversed. * Appeal from the general term of the Supreme -* Court, in the first district, where, upon a writ of error to the Superior Court of the city of New York, a judgment entered in favor of the plaintiffs, upon a report of referees, had been affirmed in part, but reversed as to the residue, and a new trial ordered upon the latter portion of it. (Reported below, 6 Barb. 419.) This was an action of covenant, brought by Story and others, in the superior court, against the New York and Harlem Railroad Company, upon a contract, under seal, for the construction of about twelve miles of the defendants’ railroad from Williamsbridge to White Plains, to recover for work done, and' damages for being prevented by the defendants from completing the work under their contract. By the contract, the plaintiffs were to be paid, half in the bonds of the company, and half in cash; “ the cash portion to depend upon a subscription made by the inhabitants of Westchester county;” and in case that subscription should not be paid, the company reserved the right of stopping the work, until they could obtain such instalments. The terms of the Westchester subscription were, that the subscribers were to loan to the company the amount set opposite to their names, in ten monthly instalments, commencing 1st August 1841, with interest. The company were to execute their bonds to each subscriber, for the amount subscribed, payable in five years, with interest semi-annually, secured by a mortgage to Gouverneur Morris (including the sum of $40,000 then due to him), as a first lien upon the road from Harlem river to White Plains. The Westchester subscribers paid one or two instalments; but the railroad company never gave the mortgage, and they could not give it, not having obtained the right of way; in consequence of this default, the Westchester subscribers refused further payment. The railroad company ceased paying the contractors, and, finally, in September 1842, stopped the plaintiffs in their work, and prevented them from fulfilling their contract. The plaintiffs had sub-contracted for the entire work, at fixed prices, which, if they had been allowed to complete their contract, would have given them a profit. The sub-contracts were made under the eye, and with the approbation, of Mr. Ship-man, the engineer of the company. *The cause was referred to referees, who re- f ;¡, R_ ported in favor of the plaintiffs the sum of *- $19,020.51; of which, the amount of $6624.44 was specifically allowed for damages for the suspension of the work, and the residue for work done and materials furnished in pursuance of the contract, and interest thereon. In estimating the damages, the referees allowed the difference between the contract price, and what the plaintiffs were to pay the sub-contractors for doing the work. The superior court denied a motion for a new trial, and entered judgment for the plaintiffs for the sum reported by the referees. *On a writ of error from r * go the supreme court, the judgment was affirmed as to the amount allowed for work and materials, with interest, and execution awarded for the same, with costs; and as to the sum awarded for damages, the judgment was reversed, on the ground that ■ an erroneous rule of damages had been adopted by the referees, and a new trial was ordered, upon that portion of the plaintiff’s claim. Both parties appealed from this judgment. Sherwood, for the plaintiffs. O’Conor, for the defendants. [MAJORITY — Foot, J. Gardiner, J.] Foot, J. — This action was brought by the respondents against the appellant, in the superior court of the city of Hew York, to recover a balance-due to them for work done on the railway of the appellant, under a contract, ■ and for damages sustained by a breach of the contract. The cause was referred to referees, and they reported a large sum due to the respondents for work done, and another large sum due them for damages sustained for a breach of the contract. In obedience to an order made-by the superior court, the referees reported specially the testimony and proceedings before them. A motion was made by the appellant to set aside the report; it was denied by the court, and judgment given in favor of the respondents for the whole amount reported to be due to them. The special report of the referees having been incorporated in the record, the appellant brought a writ 89 ] of error to the *supreme court; that court affirmed the judgment of the superior court so far as given for a balance due the respondents for work done, and reversed it so far as given for damages for a breach of the contract. Both parties have appealed to this court, from the judgment of the supreme court. The first question is, whether the supreme court had authority to affirm in part, and reverse in part the judg-ment of the superior court. . I see no objection to the exercise of such a power. The present supreme court, in each district, has the same powers and exercises the same jurisdiction as our former supreme court. (Laws of 1847, p. 323, § 16.) That court often exercised the power of affirming in part and reversing in part, a judgment brought in review before it on writ of error, where such judgment was for distinct things. (Smith v. Jansen, 8 Johns. 111; Bradshaw v. Callaghan, Id. 558; Anon., 12 Id. 340; see also Bronson v. Mann, 13 Id. 460; Williams v. Sherman, 15 Id. 195; Dennison v. Collins, 1 Cowen 112; Parker v. Van Houten, 7 Wend. 147; Sheldon v. Quinlen, 5 Hill 442, and note a.) The principle settled in these cases seems to be this: that where a judgment is not entire, but is for different things separable in their nature, and separated on the record, the supreme court, under its common-law powers, may reverse in part and affirm in part. In the present case, the two grounds of recovery are in their nature distinct, and are, in fact, separated through the whole proceedings; the testimony which shows the amount due for work done, has no bearing on the claim for damages for a breach of the contract, and vice versd; the referees consider the two subjects separately, and report a distinct amount for each; there is no controversy about one, while theré is a serious question about the other. On the whole, I think this a proper case for reversal in part and affirmance in part, provided the part reversed is erroneous. The next inquiry then is, whether the judgment of the supreme *court, reversing the judgment of the ^ superior court so far as it related to damages for *- a breach of the contract, is correct. On this branch of the case, there is only one question presented, which this court can review, and even that is embarrassed by the want of a distinct finding of the facts by the referees. That question relates to the rule of damages for the breach of the contract, which the referees apuear to have adopted, and the superior court approved. The respondents made sub-contracts for all the work they had contracted with the appellant to perform on their railway, and the only evidence given of the damages sustained by the respondents, by reason of the suspension of the work by the appellant, was the testimony of the appellant’s chief engineer, who proved and verified a statement of the difference between the amount the respondents were to receive on their contract with the appellant, and the amounts they were to pay on their sub-contracts. This witness also proved that, at the time the work was stopped, labor and materials were decreasing in value, and had been decreasing for some time previously. On this testimony, the referees reported, that there was due to the respondents for damages sustained by them for a breach of the contract by the appellant, in suspending the work, the exact difference stated by the witness, viz., $6624.44. It is, therefore, obvious, ■ that the referees adopted, as a rule of damages, the difference between the principal and subcontracts. This rule of damages was fully considered in the important case of Masterton v. The City of Brooklyn (7 Hill 61), and held not only to be entirely inadmissible, but that a sub-contract could not be taken into consideration as an item of evidence, in estimating the profits of the principal one. The reasons given by the learned Chief Justice for laying it entirely out of view, are full and satisfactory. (Id. 72-3.) My opinion, therefore, is, that the report of the referees allowing the damages in question, was erroneous, and should not have been confirmed by the superior court. The inartificial manner in which the question is presented on the record, has greatly embarrassed me, but after a careful examination *of the objection and yi -1 decisions, I am inclined to think, that the court can notice and review *it. My conclusion is, that the judgment of the supreme court be affirmed, as thereby there will be a new trial in the superior court of the question of damages.- A majority of the court concur with me in the opinion, that the rule of damages adopted by the referees was errónea us, but they are of opinion, that the judgment of the superior court could not be affirmed in part and reversed in part. The judgment of this court, therefore, is, that the judgments of the supreme court and superior court be reversed, and that a new trial be had in the superior court, with costs to abide the event. Gardiner, J. — The judgment should be reversed and the cause sent back, upon the ground that, on a bill of exceptions, the court have affirmed part and reversed part of an entire judgment of the superior court. One portion of the cause, therefore, has been sent back for a new trial, and the other is brought here; the different sections of the cause, separated by the judgment of the supreme court, have continued to diverge, until one fragment is to be found in the court of original jurisdiction, and the other in the court of last resort. With a view to a reunion, I am of opinion, that the judgment should be reversed, and the whole case remanded for a new trial. Judgment reversed, and new trial awarded. And see Devlin v. New York, 63 N. Y. 8. See Lawson v. Pinckney, 8 J. & Sp. 187.