Village of Argyle v. Plunkett , 162 N.Y.S. 242 ( 1916 )

Howard, J.:

This action is by the village of Argyle against a surety company and a contractor to recover upon a bond given for the faithful performance of a contract. The issues presented by the pleadings were sent to a referee, and he has found against the defendants, specifying two items of damage, one because of the failure of the contractor to pay his bills, resulting in liens against the municipality which were paid by the municipality, and one growing out of the failure of the contractor to complete his work on time, resulting in liquidated damages. The first item is $1,428.62; the second $1,880. These aggregate $3,308.62.

In considering the subject of liquidated damages we feel that the learned referee failed to apply a certain fixed and well-recognized rule. The referee found as a fact that the village, the plaintiff herein, delayed the contractor twenty-one .days in completing the work. The evidence supports this finding. This delay was a substantial hindrance to the progress of the work.

Where one party to a contract is himself partly responsible for the delay in the completion of the work, the clause in the contract providing for liquidated damages is abrogated. An apportionment of liquidated damages under such circumstances will not be tolerated. This doctrine, framed in" various phraseology, has been announced so repeatedly and by such high authority that it would be surplusage to cite more than two or three of the leading cases. Among those readily at hand are Dannat v. Fuller (120 N. Y. 554); Weeks v. Little (89 id. 566); Callanan Road Improvement Co. v. Village of Oneonta (117 App. Div. 332).

The latter case was decided by this court, and in the closing sentence of his opinion Hr. Justice Cochrane said that “ whenever a party attempts to enforce such a claim [one for liquidated damage for failure to complete the work on time] he should be quite certain that he is himself without fault and has fully observed on his part the requirements of his contract.”

We see no reason why the rule should not be applied in the case before us. Liquidated damages savor of a penalty. The levying of such damages upon the party in default is a drastic enforcement of the contract. The party insisting upon this literal, strict and severe enforcement of the terms of a contract must be wholly free from fault. The plaintiff in this case does not stand before the court in that attitude.

It follows that the judgment should be reversed unless the plaintiff stipulates that it be modified by deducting the liquidated damages, in which case it should be affirmed as so modified.

All concurred.

Judgment reversed and new trial granted, with costs to the appellant to abide event, unless the plaintiff stipulates that the judgment be modified by deducting the liquidated damages, in which case the judgment is so modified, and as modified affirmed, with costs.