Pardee v. Douglas ( 1907 )

Gaynor, J.:

The controlling facts come down to just this: The Syndicate Petroleum Company had a contract with Spellacy & McCay, by which the latter undertook to bore an oil well for it 1,000 feet deep, unless oil in paying quantities should be. obtained at a lesser depth. To get the funds to pay for the work as it progressed the said comjpany entered into a contract with the defendants whereby the latter agreed to furnish the money and pay it to the said Spellacy & McCay as their payments came due for the work, and the former agreed to deposit certificates for 100,000 shares of its stock with á specified bank to be transferred from time to time by said bank to. the defendants at tlie rate of five cents a share in payment of the money they should pay to Spellacy & McCay on vouchers approved by the-said Syndicate Petroleum Company. The stock was deposited with the bank but the defendants broke tlie-contract and never paid any money, under it. The said company then proceeded to bore a well but it collapsed and became worthless after being sunk about 500 feet. The cost was $3,222.06.

What is the said company’s measure of damage for the' defendants’ breach? The referee allowed the said $3,222.06. This was error. The measure was the excess of the cost of boring the well agreed upon over the value of tlie 100,000 shares of stock (Laraway v. Perkins, 10 N. Y. 371). Under the judgment in this case the company has the stock and is also given the . amount of the expense of boring the well that failed. As there was no evidence of. the value of the stock only nominal damages could have been given.

The -judgment js based on the theory that the contract sued upon was an, executed contract, i. e:, wholly performed by the said, company, in that tlie shares of stock were actually delivered to the defendants by being deposited with the bank, and- are theirs, which is'not'so. '

The judgment should be reversed.-,

Woodward, Rich and Miller, J.J., concurred; Hiesciiberg, P. J.,-not voting.

.Judgment reversed and new trial. granted, costs to abide the • ■ event.