Page images

material difference between the two. Moreover, as we view it, the opinion of the court in Lynch v. Mayor correctly states the law applicable to this case, and, while the court in that case did not discuss said section 123 of the consolidation act, now superseded by said section 149 of the charter, they evidently deemed it, as we do, immaterial. Had the contract been executed, the provision quoted from said section 149 would apply, and said contract would have no binding force until the certificate was made.

The plaintiff was permitted to recover the sum of $30,231.09, the prospective profits which his proof showed were lost, and the sum of $2,052.50 for the following expenditures, to wit: Cost of pipe purchased, $975.50; the cost of two valves, $277; cost of bond, $350; expense of formulating bid, $150; and cost of plans, $300. The prospective profits lost were proper elements of damage under the leading case of Masterton v. Mayor, y Hill, 61, 42 Am. Dec. 38, which both sides rely upon. These profits were properly arrived at by deducting what it would cost to execute the contract from the contract price, and it may be conceded that the plaintiff could recover in addition to that any expense to which he was put and from which he could derive no benefit by reason of the defendant's breach, but it was not shown that the plaintiff would lose the cost of the pipe and valves. There was some evidence that the pipe had no value except for the iron, and that there was no market for the valves except in the city of New York, but there was not sufficient proof to show what either the pipe or the valves were worth. As to the other items of expense enumerated, supra, if allowable at all, they should have been included in the estimated cost of doing the work, but an examination of the evidence discloses that the prospective profits were arrived at without including said items of expense in the estimated cost of doing the work; hence, if allowed at all, they should be deducted from the prospective profits.

The plaintiff was also allowed interest from the date of filing the claim. This, we think, was improper, for the reason that the amount due was not capable of being ascertained by mere computation. While the rule that interest is not allowable on unliquidated demands has been somewhat modified, interest has only been allowed where the debtor, by reference to established market values, contract prices, or otherwise, could by mere computation ascertain the amount which he owed. See Gray v. Central R. R. Co. of New Jersey, 157 N. Y. 483, 52 N. E. 555; Sweeny v. City of New York, 173 N. Y. 414, 66 N. E. 101; Excelsior Terra Cotta Co. v. Harde, 181 N. Y. 11, 73 N. E. 494, 106 Am. St. Rep. 493. The ascertainment of prospective profits on such a contract as the one involved here depends upon many elements other than established market values, and it cannot be said that such profits could have been ascertained by the defendant by mere computation. Upon the proof, the plaintiff was only entitled to recover as damages the sum of $30,231.09, and the extra allowance should be computed on that sum..

The judgment should be modified accordingly. Judgment and order reversed and new trial granted, costs to abide the event, unless the plaintiff within 20 days stipulate to reduce the recovery to

106 N.Y.S.-12

and 140 New York State Reporter the sum of $30,231.09, with a proportionate reduction of the extra allowance, in which event the judgment as reduced is affirmed, without costs. All concur.

(121 App. Div. 510.)

BOSOIAN v. HUBBARD et al. (Supreme Court, Appellate Division, Second Department. October 11, 1907.) 1. APPEAL-REVIEW-EVIDENCE.

Where a verdict was directed for defendants, all contested facts must be treated as established in plaintiff's favor on appeal. 2. CONTRACTS_MODIFICATION-IMPLIED ASSENT-SILENCE,

Plaintiff, an uneducated Armenian, was engaged in certain speculative transactions in cotton through defendants, his brokers, under a parol contract that his account would not be closed out without calling him for more margin. Held that, under the rule requiring mutuality of agreement to the modification of a contract, such agreement was not modified by plaintiff's mere silence after receiving various memoranda of transactions made by defendants for his account on a printed form, at the foot of which appeared a clause, which plaintiff had never read, that it was understood that on all margin business defendants reserved the right to close transactions when margins were running out, without further notice, etc.

Appeal from Trial Term, Queens County.

Action by John Bosoian against Samuel T. Hubbard and others, doing business as Hubbard Bros. & Co. From a judgment on a directed verdict in favor of defendants, plaintiff appeals. Reversed, and new trial granted.


Nathan F. Giffin (George F. Maguire, on the brief), for appellant. Eugene D. Hawkins, for respondents.

WOODWARD, J. This is an action against the members of a partnership doing business as cotton brokers to recover damages for closing out, without notice to the plaintiff, certain speculative accounts which they were carrying for him pursuant to a contract the terms of which are in dispute; the plaintiff claiming that it was oral and the defendants that it was partly oral and partly written. For the purposes of this appeal, the verdict for the defendants having been directed by the court, all contested facts must be treated as established in favor of the plaintiff. It appears then that in January, 1904, the plaintiff had two conversations with one of the defendants at their offices, during which he was told what the margin and rate of brokerage would be, and was assured by the defendant Dillingham that the defendants would not close out his account without calling on him for more margin. Thereupon, and in pursuance of this understanding, the plaintiff transferred his account from another broker, and began doing a marginal business in cotton through the defendants, spending most of his time at their office, eating his luncheons and having his address there. When during business hours he was not there, he was in the Cotton Exchange gallery, three minutes distant. After each purchase or sale by the plaintiff of a contract for the future delivery of cotton,

one of the defendants' clerks would hand the plaintiff a written memorandum showing the amount, price, and time of the particular cotton bought or sold. These memoranda were made upon a .printed form, at the foot of which, among other printed matter, appeared the following:

"It is further understood that on all marginal business the right is reserved to close transactions when margins are running out, without further notice, and to settle contracts in accordance with rules and customs of Exchange where order is executed. Hubbard Bros. & Co."

The plaintiff is an Armenian, uneducated, reads with difficulty, and never read the printed matter on these memorandum slips. On Saturday, June 11, 1904, at about 10:30 in the forenoon, the plaintiff, while in the defendants' office, told the margin clerk that he wished to buy 200 bales of July cotton. The clerk, saying, "Let me see if you have enough margin," figured the margin, said, “Yes; you can buy it," and ordered another clerk to buy it for the plaintiff. A few minutes later the plaintiff was handed a memorandum, Exhibit 9, reading : “10:36 Mr. Bosoian bought two July 12:20 H. B.” At that time the ticker gave the price of cotton as 12.07, but, on calling the clerk's attention to the large difference in price against him, the plaintiff was told that it was a mistake. He delared his intention to go next door to the gallery of the Cotton Exchange, and asked the clerk to let him know if it became necessary to put up more margin, and the clerk said, “All right.” At about 15 minutes before 12, while in the gallery of the Exchange, the plaintiff heard 12.41 offered for July cotton, went back to defendants' office to sell at the considerable profit then appearing, and found that he had been sold out at 12.22. The clerk, in explanation, told him that they thought cotton was going down, and "Mr. Dillingham didn't let me send to you over on the Cotton Exchange gallery. He said to me, 'Close him out,' and so I closed you out.” Much of the foregoing was controverted by the defendants' witnesses, but this only raised a question of fact for the jury.

At the close of all the evidence, the learned trial court directed a verdict for the defendant on the ground that the contract was modified by the plaintiff's "silent acquiescence, despite the repeated notices of that modification”; that is, the paragraph above quoted, which purported to reserve to the defendants the right to close out marginal transactions without notice. An exception was duly taken to the dismissal of the complaint. No authority has been cited in support of this theory of modification, nor have I been able to find any. If it is sound, a party to a contract may modify it by giving repeated notices of his “modification” to the other party, provided the latter silently receives them; they being printed on slips carrying brief written memoranda made necessary by the nature of the contract. This cannot be true, for there is no mutuality of agreement which is as indispensable to the modification as to the making of a contract. The waiver of a provision of a contract is in effect a modification of it, and the Court of Appeals has held that a waiver cannot be inferred from mere silence. Titus v. Glens Falls Ins. Co., 81 N. Y. 410, 418.

No modification was made out in the case at bar. The case should

and 140 New York State Reporter have been submitted to the jury, and the judgment should therefore be reversed, and a new trial granted.

Judgment and order reversed and new trial granted, costs to abide the event. All concur.



(Supreme Court, Appellate Division, Fourth Department. September 25, 1907.) 1. BAILMENT-AGREEMENT TO REPAIR-ACTIONS-MEASURE OF DAMAGES.

The failure of the lessee of a dredging outfit to comply with the terms of the lease, whereby he agreed, besides paying rent for the use of the outfit, to make repairs and return the property in as good condition as when received, entitled the lessor, who regained possession of the property and made partial repairs, to recover the cost of these repairs and all those still necessary to restore the outfit to as good condition as when delivered, less the depreciation resulting from its ordinary use during the leased term, and for the value of the use of the property for the time it was lying idle because of being repaired, together with interest on these amounts, on the condition, however, that the expense of repairing any part of the property does not exceed the original value thereof, or involve an expense greatly disproportionate to the amount of its de

preciation by reason of its injury. 2. SAME.

Where boats leased were not repaired as agreed by the lessee, and the lessor made a part of the repairs, in the making of which it was necessary to prepare the boats for dry dock and to dry-dock them, the lessor cannot recover the expense of preparing for dry dock and of dry-docking the boats, incurred in making the partial repairs, and also recover the expense of performing these acts again in order to complete the repairs; no reason appearing why all the repairs could not have been made when the boats were first docked.

Kruse, J., dissenting.

Appeal from Judgment on Report of Referee.

Action by the Dunbar & Sullivan Dredging Company against the Title Guaranty & Trust Company of Scranton, Pa., to recover on a bond given to secure the performance of a contract. From a judgment for plaintiff, defendant appeals. Reversed, and new trial ordered.

Plaintiff's action is based upon a breach of the covenants contained in a bond which defendant gave to plaintiff to secure the performance of certain 'agreements contained in a contract which plaintiff made with the Donnelly Contracting Company contemporaneously with the execution and delivery of the bond. By this contract plaintiff, the owner, leased to the Donnelly Company tools and accessories, consisting of tugs, scows, and a dredge, with spare parts and appliances, for use by the latter company during the dredging season of 1904. In addition to paying rent for the use of this property, the Donnelly Company, among other things stated in the contract on its part to be performed, agreed to replace immediately parts when broken, and make repairs, and do all things necessary to maintain the property in a condition equal to that in which it was when the lessee received it. It further agreed to return the leased property to the lessor, the port of return to be that one, of the two designated in the contract, selected by the lessor; and the lessee was before return to cause the scows and dredge, called plant 1, to be docked, calked, and generally repaired at its expense, so as to render that plant in a condition equal to that in which it was received. It further in express terms warranted the return of all and every part of the leased property in a con



dition equal to that in which it was received. The condition of the plant was also particularly described, and the value of each vessel forming a part of it agreed upon. A standard, by which to gauge both the condition of the separate items of the plant when the property should be returned, and the value of such items as the lessee by reason of loss might be unable to return, was thus established. The property, when it again came into the lessor's possession, required extensive repairs to place it in the condition it was when the lessee received it. Meanwhile the lessee had become bankrupt, and both the lessee and the defendant, its surety, failed to restore by repair the property to the condition required by the contract. Plaintiff, after regaining possession of the leased property, made partial repairs upon the plant, and thereafter began this action to recover of the surety company the damages claimed to have been sustained by reason of the lessee's defaults, for which defendant was liable as surety. These items of damages included, among other things, the expense incurred by plaintiff in making partial repairs of the scows, tugs, and dredge forming part of the leased plant, and also the amount claimed to be necessary to complete these repairs. Defendant's answer admits liability to plaintiff on its bond, and puts in issue only the amount of damages which plaintiff is entitled to recover; and on this appeal defendant assails the judgment appealed from only so far as it includes the sum of $20,200, allowed by the referee as the amount necessary to complete the repairs on these vessels.

Argued before McLENNAN, P. J., and SPRING, WILLIAMS, KRUSE, and ROBSON, JJ.

W. H. Cuddeback, for appellant.
T. C. Slee, for respondent.

ROBSON, J. In fixing the damages to be awarded plaintiff, the referee adopted the rule of damages applied in admiralty cases, and allowed the cost of repairs already made by plaintiff and those yet to be made to restore the boats to the condition they were when leased, and for the idle time of boats while repairs were being made, together with interest on these amounts. We think that this rule, adopted by the referee, is correct, both because it is clearly within the terms of the agreement itself, as embodied in the language of the contract, and also, even if not so verbally expressed, it would, as matter of law, have been implied as the proper rule of damages to be applied in this case. Auten v. Bennett, 183 N. Y. 496, 76 N. E. 609. Plaintiff's loss for lay time of the boats while undergoing repairs, as well as interest upon the sums awarded for repairs and lay time, were proper items for which plaintiff was entitled to allowance in fixing the amount of its damages. Whitehall Co. v. N. J. Steamboat Co., 51 N. Y. 369-373; Mailler v. Express Propeller Line, 61 N. Y. 312-316.

The application of this rule made by the referee in his decision of the case has, however, resulted, as we conceive, in error which requires a reversal of the judgment entered on his report. When these vessels were returned in the condition already adverted to, the plaintiff was then entitled to recover all the expense necessarily and properly required in repairing them, so that their condition should be equal to that in which they were received, less, of course, the depreciation resulting from the ordinary use of the same during the term for which they were leased, and, of course, also providing as a further condition that the expense of repairing any one of them should not exceed its original value, and, further, should not involve an expense greatly

« PreviousContinue »