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Millard Const. Co. v. Deiches

Supreme Court of New York, Appellate Division

April 12, 1912


APPEAL by the plaintiff, the Millard Construction Company, from a judgment of the Supreme Court in favor of the defendant,

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entered in the office of the clerk of the county of New York on the 22d day of December, 1910, upon the verdict of a jury rendered by direction of the court at the close of plaintiff's case, and also from an order entered in said clerk's office on the same day denying the plaintiff's motion for a new trial made upon the minutes.


Max D. Steuer, for the appellant.

George M. Mackellar, for the respondent.


Prior to the 24th of September, 1907, the plaintiff had a contract to complete certain railroad construction in the State of New Jersey and on that day made a contract with the Balanced Cable Crane Company by which the crane company agreed to sell, deliver and erect on certain foundations and tracks located at the site of the works of the plaintiff in and about the construction of the railroad in Jersey City, State of New Jersey, and the said purchaser agreed to buy the machinery, apparatus, equipment and supplies specified. The machinery to be purchased by the plaintiff was 'Six (6) patented Balanced Cable Cranes complete with carriages,' and the contract with great particularity specifies the capacity of and work that these cranes were to do. The crane company guaranteed that the said machinery specified should be well made, of good workmanship and material and capable of doing the work specified, and further agreed to repair the machinery, to furnish a similar part to replace any of the material which within one year after date is proven to have been defective. It further provided that if after the installation of the said cable cranes or any of them the purchaser should require the crane company to operate all or any of them in actual work that the plaintiff would pay said company $20 per day per crane for each and every day said crane was so operated. It was further agreed that one of the said cranes complete should be in place in proper running order and condition on or before October 8, 1907; that within one week after the said crane was accepted by the plaintiff and the installment due therefor paid the second of said cranes should be similarly erected and placed in proper running order and condition for operation,

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and that within one week after such acceptance and payment for each crane thus erected another crane should be similarly erected in place in proper order and condition and ready for operation until all six had been so erected. The price that the plaintiff agreed to pay for such cranes was $31,629.94, of which $7,765.88 had been paid before the execution of the contract, $15,000 paid in cash upon the signing of the contract, and $8,864.06 in six equal payments, the first to be payable as soon as the first of said cranes was erected, and each of the remaining payments payable without interest on a like completion of each of the remaining cranes. It further provided that an acceptance of any of the cranes should not conclude the plaintiff against any faulty material which should develop through use of the load carriages, and any such faulty material should be replaced or repaired by the company; nor should such acceptance conclude the plaintiff in the case of a subsequent failure of a crane or cranes to substantially perform the work intended for it, provided such failure occurred within a reasonable time after acceptance and without negligence on the part of the plaintiff. It further provided that the crane company agreed to furnish to the plaintiff simultaneously with the execution of this agreement a satisfactory surety company's bond for $20,000, conditioned for the faithful performance of all the terms, stipulations and conditions of this contract on the part of the crane company to be performed.

In pursuance of this last clause of the contract the crane company furnished a bond by which it and the defendant acknowledged themselves indebted to the plaintiff in the sum of $20,000. The bond then recited that the principal, the crane company, had entered into a written contract with the plaintiff, being the contract before mentioned, for the delivery and erection of six balanced cable cranes complete according to the terms and conditions of the said contract, a copy of which contract was made a part of the bond. The condition of the obligation was that if the principal should faithfully perform said contract according to the terms, covenants and conditions thereof, except as thereinafter provided, then the obligation should be void, otherwise to remain in full force and effect. It is then provided that 'This bond is executed by the

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Surety upon the following express conditions, which shall be conditions precedent to the right of the Obligee to recover hereunder.' One of the conditions was that the surety should be notified in writing of any act on the part of the principal or its agents or employees which might involve a loss for which the surety is responsible immediately after the occurrence of such act shall have come to the knowledge of the said obligee. The bond also provided that the defendant should have the right in its option to assume the contract and sublet or complete the same if the principal should cease operation thereunder, in which event all money provided by the contract to be paid to the principal should be paid to the surety under the same conditions as by the terms thereof such money would have been paid to the principal had the contract been duly performed by it; that the plaintiff should retain the last payment and reserve due to the principal until the complete performance by the principal of all the terms, covenants and conditions of the contract and until the expiration of the time within which liens or notice of liens may be filed, and the surety should be notified in writing before the last payment should be made or said reserve paid.

The complaint alleges that the crane company did not perform the said contract, and failed, refused and neglected to perform the same in certain particulars specified in the complaint: First, that it erected only four of said cranes, and failed to sell, deliver and erect the other two; second, that the crane company did not cause the first of said machines to be erected on or before October 8, 1907, but that the first crane was not erected until October 24, 1907; the second until November 11, 1907; the third until December 3, 1907; the fourth until December 28, 1907, and the fifth and sixth machines were never delivered or erected; third, that the cranes have failed in all respects to meet the terms, covenants and guaranties of the said contract, and the said machines were not well made, of good workmanship and material, and were not capable of doing ...

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