
    The Crocker-Wheeler Co., Respondent, v. The Varick Realty Co., National Surety Co. et al., Appellants.
    (Supreme Court, Appellate Term,
    May, 1904.)
    Action upon a contract for the price — Effect of the other party’s allowing the contractor to perform the contract after he had failed to perform it within the times fixed for performance.
    Where a party, having a- legal right to have a contract performed within a time fixed, permits, after that time has expired without performance being made by the person contracting with him, the latter to go on and perform the contract, the party thereby waives any right he might have had to plead the delay as a defense to an action for the price but does not waive his right to interpose in the action a counterclaim for any actual damage he suffered by the delay.
    Appeal by the defendants from a judgment of the City Court of the city of Rew York, rendered in favor of the plaintiff.
    
      Gould & Wilkie (John L. Wilkie and Moses Ely, of counsel), for appellant Varick Eealty Co.
    L. Hollingsworth Wood, for appellant National Surety Co.
    Liebmann & Naumberg, for respondent.
   Scott, J.

The plaintiff contracted with the defendant Varick Eealty Company to furnish and install, in a building owned by said defendant, two electric elevators. One of the elevators was to be in operation by February 2, 1903; the installation of the other to be completed as quickly as possible after the installation of the first; ten days being mentioned as the probable time. It is made clear by the evidence that much stress was laid by defendant upon the necessity of having at least one elevator in running order by February second, and that plaintiff was distinctly notified that no contract would be made which did not definitely state the date for the complete installation of at least one of the elevators. There can be no doubt that it was thoroughly understood by both parties that the timely installation of at least one elevator was an important and essential element of the agreement. The reason for this insistence on the part of the defendant was that it had already negotiated, and was about to execute, a lease of the premises from February first, under which the tenant was to pay no rent until at least one elevator had been installed and was in running order. It was shown that the plaintiff, at the time of making its contract with defendant, or very shortly thereafter, had knowledge of the making of such a lease and that its agent, in the transaction between plaintiff and defendant, had knowledge of the special clause respecting the payment of the rent. At all events, from the character and size of the building, the plaintiff might well be- held bound to know that its value for rental purposes would be much affected by the existence or nonexistence of proper elevator service. The plaintiff, for reasons which constitute no excuse, did not comply with its contract as to time, and did not complete either elevator until March second. The lessee of the building, under the terms of his lease, refused to pay the rent for the month of February, amounting to $1,750. Notwithstanding plaintiff’s failure to complete its contract on time, the defendant did not exercise its right to terminate the contract for this reason, but permitted plaintiff to go on and complete the work. The effect of thus permitting the plaintiff to go on and perform, notwithstanding its default as to the time of performance, is well settled. The defendant thereby waived any right it might have asserted to plead the delay as a defense to an action for the agreed price. Dunn v. Steubing, 120 N. Y. 232. It did not, however, thereby waive its right to counterclaim for any actual damage it might have suffered by reason of the delay. Granniss & Hurd L. Co. v. Deeves, 72 Hun, 171. Unless, therefore, the defendant in some way waived its claim for damages, it is still in a position to recover them. We can find no evidence of such a waiver. As has been shown, the mere forbearance to insist upon a forfeiture did not constitute a waiver. Nor did the letter from the defendant’s attorneys, which is much relied upon by plaintiff. That letter was dated March seventh, after the first elevator had been installed, and in terms applies to an, elevator not then installed, by which must necessarily have been meant the second elevator, concerning which no controversy exists. The error, into which the court below fell, was in treating the defendant’s acquiescence in the completion of the contract as a waiver of damages for nonfulfillment, instead o'f only a waiver of any defense to a claim for the contract price. Upon the case made, the plaintiff was entitled to recover the unpaid balance of the contract price, but the defendant, as against this, was entitled to recoup its damages, if any, suffered by reason of the unexcused delay in installing the first elevator.

The judgment must be reversed and a new trial ordered, with costs to the appellants to abide the event.

Freedman, P. J., and Tbuax, J., concur.

Judgment reversed and new trial ordered, with costs to appellants to abide event.  