Spence v. . Ham , 163 N.Y. 220 ( 1900 )

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] According to the opinion of the Appellate Division it was the intention of that court to reverse the judgment upon the facts as well as the law, but as the order of reversal is silent upon the subject, the statute compels us to presume that the judgment was not reversed upon a question of fact. (Code Civ. Pro. § 1338;Bomeisler v. Forster, 154 N.Y. 229; Koehler v. Hughes,148 N.Y. 507.)

It is important for counsel in preparing a judgment or order to carry into effect the decision of an Appellate Division, to see that it is so drawn as to properly express what the court actually decided. We have repeatedly called attention to the necessity, when the reversal is on the facts, or when the affirmance is unanimous, of so stating in the order or judgment, yet cases are constantly coming before us in which the rights of parties are sacrificed by a disregard of the practice established by the legislature or the court.

The condition of the record leaves only three classes of errors open to our consideration:

(1) Whether upon the facts found by the referee his conclusion of law is correct.

(2) Whether an essential fact was found without any evidence, which according to any reasonable view would warrant it.

(3) Whether a material error was committed in receiving or rejecting evidence. (Gannon v. McGuire, 160 N.Y. 476;Petrie v. Trustees of Hamilton College, 158 N.Y. 458; Edson v. Bartow, 154 N.Y. 199; Otten v. Manhattan Ry. Co.,150 N.Y. 395.) If the referee committed one or more errors, under this classification, the order of the Appellate Division, reversing his judgment upon a question of law only, should be affirmed; otherwise it should be reversed.

The referee found that the contract in question had been substantially performed by the plaintiff, yet he also found certain omissions and defects for which he allowed compensation to the defendant, and certain other omissions and defects for which he allowed no compensation, because the defendant did not prove what it would cost to complete the contract in this regard. Thus upon the face of the report the question arises whether the burden was upon the contractor or the owner to show what it would cost to remedy defects. The question, as presented by the record, is the same as if the plaintiff had alleged substantial instead of complete performance, because that is the basis upon which he recovered. In order to recover at all he was obliged to show either full or substantial performance. Upon showing full performance he could recover the full contract price, but upon showing substantial, which is but partial performance, he could only recover the contract price after deducting the sum required to remedy the omissions, which, when remedied, would make performance complete. Each party would thus get what he was equitably entitled to; the plaintiff, payment for all that he did, and the defendant, compensation for all that the plaintiff omitted to do. Clearly there should be no recovery for what the plaintiff agreed to do, but did not do, yet such is the effect of the decision we are reviewing. Substantial performance is performance except as to unsubstantial omissions with compensation therefor. When the omission is slight and unintentional, in order to prevent the hardship of a failure to recover even for that which was well done, compensation is substituted pro tanto for performance. This is the modern rule adopted upon the theory that the parties are presumed to have impliedly agreed to do what was reasonable under all the circumstances with reference to the subject of performance. Thus it was said in Woodward v. Fuller (80 N.Y. 312, 315), "if the plaintiff is to be held strictly to the terms of his contract, he must fail to recover thereon, and that he should be, is the effect of the earlier cases in this state. (See those cited in the opinion of COMSTOCK, J., in 17 N.Y. supra, 185.) But there has been a relaxation of that rule, and now on such a contract there may be a recovery without a literal or exact performance of it. It is now the rule, that where a builder has in good faith intended to comply with the contract, and has substantially complied with it, although there may be slight defects caused by inadvertence or unintentional omissions, he may recover the contract price, less the damages on account of such defects." So in Nolan v. Whitney (88 N.Y. 648, 649) the court announced that "it is a general rule of law that a party must perform his contract before he can claim the consideration due him upon performance; but the performance need not in all cases be literal and exact. It is sufficient if the party bound to perform, acting in good faith, and intending and attempting to perform his contract, does so substantially, and then he may recover for his work, notwithstanding slight or trivial defects in performance, for which compensation may be made by an allowance to the other party." We quote from still another case as follows: "The question of substantial performance depends somewhat on the good faith of the contractor. If he has intended and tried to comply with the contract and has succeeded, except as to some slight things omitted by inadvertence, he will be allowed to recover the contract price, less the amount necessary to fully compensate the owner for the damages sustained by the omission. (Woodward v.Fuller, 80 N.Y. 312; Nolan v. Whitney, 88 id. 648;Phillip v. Gallant, 62 id. 256, 264; Glacius v. Black, 50 id. 145; S.C., 67 id. 563, 566; Johnson v. De Peyster, 50 id. 666; Sinclair v. Tallmadge, 35 Barb. 602.)" (Van Clief v. Van Vechten, 130 N.Y. 571, 579.)

He who relies upon substantial as contrasted with complete performance must prove the expense of supplying the omissions, or he fails in his proof, for he cannot recover for full performance when a part of the contract is still unperformed. The doctrine of substantial performance necessarily includes compensation for all defects, which are not so slight and insignificant as to be safely "overlooked on the principle of de minimis non curatlex." (Van Clief v. Van Vechten, supra.) Unsubstantial defects may be cured, but at the expense of the contractor, not of the owner. The contractor cannot recover the entire contract price when defects or omissions appear, for he must show not only that they were unsubstantial and unintentional, but also the amount needed to make them good, so that it can be deducted from the contract price and a recovery had for the balance only. This is an essential part of substantial performance, and hence the proof should be furnished by the one who claims substantial performance. (Zimmer v. Jourgensen, 38 N.Y.S.R. 414; S.C., 70 Hun, 222, 228; affirmed, 144 N.Y. 656; Cutler v. Close, 5 C. P. 337; Chitty on Contracts [13th ed.], 520; Hudson on Building Contracts, vol. 1, p. 394.) There was nothing decided inHeckmann v. Pinkney (81 N.Y. 211), which is relied upon by the plaintiff, that is in conflict with these views, for in that case the referee found that the "defendant had waived performance as to the items wherein there was not perfect performance."

When the plaintiff shows that he performed his contract he is entitled to judgment for the contract price, but when he shows that he performed his contract except that through inadvertence he omitted to do some unsubstantial things, he is not entitled to recover anything until he shows that the things omitted, if worthy of any attention whatever, can be supplied for a comparatively small sum, in which event he can recover the contract price after deducting that sum. This rule is liberal to the contractor, for it allows him to recover when he has not fully performed, and it cannot be extended without danger to the integrity of the contract. As he does not show full performance, it is not requiring too much of him to show what it will cost to remedy the defects in order to permit him to recover the contract price less the sum allowed for defective performance. It is for him to show this, for otherwise the owner could say "am I to pay according to my promise when the contractor does not perform according to his?" The one who fails in fully performing and who invokes the doctrine of substantial performance, must furnish the evidence to measure the compensation for the defects, as that is the substitute for his failure to do as he agreed.

The learned referee, therefore, inadvertently committed an error of law when he found that the defendant would have been entitled to a greater allowance on account of defective performance if he had proved and claimed what it would cost to complete the contract strictly according to its terms, as it was for the plaintiff, not for the defendant, to furnish the evidence to measure the allowance for omissions and defects.

We are also of the opinion that he fell into further error when he found that the defects, "for which the plaintiff is held to be responsible, were not pervasive and did not constitute a deviation from the general plan, and were not so essential that the objects of the parties in making the contract and its purpose have not, without difficulty, been accomplished." We find no evidence which, according to any reasonable view, supports this finding so far as the "failure to have girders of certain length and properly placed," and the "failure to place wooden partition on a brick wall in basement," are concerned. These were structural defects which affected the solidity of the building and tended to defeat the object of the contract. They were deviations from the general plan of so essential a character that they cannot be remedied without partially reconstructing the building, and hence do not come within the rule of substantial performance, with compensation for unsubstantial omissions. (Crouch v. Gutmann, 134 N.Y. 45.) The law is not satisfied by allowing the expense of a new girder, for instance, considered simply as a stick of timber of the right size, for the defective girder, which partially supports the building, must be removed and another put in its place in order to remedy the defect. While it may be possible to make the substitution, the process is difficult and apt to injure the structure, and hence the defect cannot be regarded as unsubstantial.

The order appealed from should be affirmed and judgment absolute, with costs, directed against the plaintiff in accordance with the stipulation given upon bringing the appeal.

PARKER, Ch. J., O'BRIEN, BARTLETT (HAIGHT, J., on last ground stated in opinion) and MARTIN, JJ., concur; LANDON, J., not sitting.

Order affirmed, etc.