
    Frances A. Parr, as Administratrix, etc., Resp’t, v. The Village of Greenbush, App’lt.
    
    
      (Court of Appeals,
    
    
      Filed January 22, 1889.)
    
    
      1. Municipal corporation—Contract to settle suit—Construction of.
    The plaintiff’s testator, P. contracted to furnish certain materials specified and do certain work at a price which the village of Greenbush) agreed to pay him; by the same contract the village agreed to furnish] sand and gravel, and to properl / grade the street. P could not perform) his part of the contract until the sand and gravel were furnished and the grading done. The final clause of the agreement was, “ and for the true and faithful performance of all and every of the covenants and agreements above mentioned, the parties to these presents bind themselves each unto the other in the penal sum of $5,000, as fixed and settled damages to be paid by the failing party.” The village, being in default, by a resolution (which it had no power to make) requested P. to furnish the sand and gravel and to do the grading, P. did as requested and then fulfilled his contract. The work done and materials furnished under said resolution was worth over $6,000. In an action brought to recover for the work done under the contract and also request by the said resolution, the court of appeals denied the right to recover for work, etc., done under the resolution, and granted a new trial. On the new trial P recovered for as much as he had done and furnished under the contract. While an -op-peal from this later judgment to the general term of the supreme court was pending the parties entered into an agreement to compromise and settle the suit, which recited that “Whereas the said parties are now engaged in liligation concerning work done * * * in the village of Greenbush, the suit being now on appeal, * * * this agreement witnesseth that the' said suit is for a valuable consideration moving between the parties compromised at the following sum,” etc. After the money was paid under said agreement this action was brought to recover the liquidated damages or 'penalty agreed upon in the contract. Feld, that the compromise agreement covered and embraced the subject of this action and was a defense thereto. Gray, J., dissenting,
    2. Same—Implied Contract—Will not arise under illegal act by CORPORATION.
    P, in furnishing the materials and the grading did nothing which he was authorized to do by virtue of his contract." As the resolution was illegal and void (being ultra vires the charter of the village), he could not recover on an implied contract under the resolution.
    3. Contract—Effect of refusal to perform condition precedent— Right of other party.
    Ordinarily when one party to a contract refuses to perform, that alone does not authorize the other party to go on with the contract, and perform for the defaulting party. Where one party to a contract refuses to "perform a condition precedent) which stands in the way of any performance by the other party, the cases are very rare where the latter party can nevertheless perform the condition and recover the expense of such performance as damages for a breach" of contract by the other party.
    Appeal from a judgment of the supreme court, general term, third department, affirming a judgment in favor of the plaintiff, entered upon the report of a referee.
    This action was commenced by Richard Parr, in his lifetime, to recover damages for the breach of a contract entered into between him and the village of Greenbush, on the 20fch day of December, 1879. By that contract hfe agreed to flag, pave and curb the west side of East street in the village as follows: To furnish and set curb stone, to furnish cobble stone and pave the carriageway four feet from the curb, to furnish and lay a course of flag stone four feet wide in the center of the sidewalk, the balance of the sidewalk to be of good paving brick. The work was to be commenced in the month of May, 1871, and completed without unnecessary delay. The village was to pay three dollars per lineal foot, when the job was completed, and was to furnish the necessary sand and gravel, and to properly grade the street. The final clause of the agreement was as follows: “And for the true and faithful performance of all and every of the covenants and agreements above mentioned, the parties to these presents bind themselves each unto the other in the penal sum of five thousand dollars, as fixed and settled damages to be paid by the failing party.” It does not appear that any action was taken by either party under this contract prior to the 30th day of September, 1873.
    On that day a meeting of the board of defendant’s trustees was held, at which the president stated that the village was threatened with law suits to the amount of $9,000 or $10,000 in the case of Richard Parr, and that in the record of the board of trustees for the year 1870 there was no mention of a contract with the board for the construction of a- sidewalk on the west side of East street. Thereupon the board, by a vote of five to four, adopted this resolution:
    
      ifResolved, Richard i?arr, Jr., be and he is required to pror ceed and perform, without delay, his contract with the village for flagging and paving and curbing the west side of East street, from Partition street to Second avenue, according to the terms of the within contract with him, bearing date December 20, 1870.”
    Then the following resolution was adopted by a like vote.
    
      “Resolved, that if the necessary sand and gravel are not furnished," and the proper grading is not done in season for the said Parr to commence work, that the said Parr is authorized to furnish said sand and gravel and do such •grading.”
    . Thereafter Parr furnished the sand and gravel and did the grading, and by the 5th day of January, 1874, claimed to have fully performed his contract. On the 13th day of January, 1874, he presented to the'board, bills for furnishing the sand and gravel, and grading, amounting in the aggregate to $6,283.25. The allowance and payment of these bills was resisted by the president and three of the trustees, but they were finally allowed and ordered to be paid hv a vote of five to four. Finally, after a change in the composition of the hoard, the village refused to pay Parr for furnishing the sand and gravel, and the grading, and also for the work performed under his contract, oh several grounds.
    About the 1st of September, 1874, Parr commenced an action against the defendant to recover for the entire work-performed and materials furnished, and in his complaint demanded judgment for $17,284.25. To that action the defendant interposed an answer, admitting its incorporation and denying all the other allegations contained' in the complaint. The action was brought to trial at a circuit and the plaintiff recovered his entire claim for the gravel, sand and grading and the work under his contract, and the judgment was affirmed upon the appeal'of the defendant at the. general term. The defendant then appealed to this court, where that judgment was reversed. 76 N. Y., 463. The grounds of the reversal, as they appear in the opinion, were-that improper evidence had been received and that the resp-. lutiotí authorizing the plaintiff to furnish the .sand and gravel and do the grading was in violation of the defendant’s charter and illegal, and that the plaintiff could not,, therefore, recover for such work and materials.
    Upon the trial of that action, as appears from the opinion-pronounced in this court, the defendant claimed that the contract "of December 20, 1870, was abandoned with the consent of Parr; that the contract was the result of fraud practiced by Parr and of fráud and conspiracy between him and the trustees of the village, or some of them; that the contract was not fully performed; that the work and materials were imperfect and inferior, and that the trustees in office at the time accepted the work and audited the bills in consequence of the fraud and conspiracy entered into between them or some of them and the plaintiff. After the decision of this court the action was referred to a referee and tried' before him, and he found that the defendant .neglected and omitted to furnish the necessary sand and gravel, and to properly grade the- street in accordance with its contract with Parr; that the plaintiff could not fully perform on his part the terms of the contract until such sand and gravel were furnished and the grading was done; that the trustees, at their meeting on the 30th of September, 1873, passed the resolutions above set out, and that pursuant to the resolutions the plaintiff furnished the sand and gravel and did the grading for the defendant to the amount of $6,293.25; that the plaintiff thereafter performed the work and furnished the materials required of him by his contract with the defendant and. according to the terms thereof, excepting that about one-third of the bricks used by the plaintiff in the work were not of the quality called for by the contract, and were unfit for paving purposes; that at a meeting of the board, held on the 20th of January, 1874, the claim of the plaintiff was approved and the president was 'ordered to pay the same, And he found, as a conclusion of law, that the defendant had waived the defects in the performance of the contract, and accepted the work performed by the plaintiff thereunder, as a full and complete performance thereof; that the plaintiff was not entitled to recover anything on account of or for furnishing the sand and gravel and grading, for the reason that there was no proof that sealed proposals for doing the same were advertised for, or that the contract therefor was awarded to the lowest responsible bidder. And he ordered judgment for the plaintiff for the amount of his claim under the contract.
    The record shows that upon that trial the defendant again assailed the validity of the contract, and claimed that the plaintiff had not performed the same according to its terms. From the judgment entered upon the report of the referee, the defendant again appealed to the general term; but it does not appear that the plaintiff appealed from so much of the judgment as was adverse to him. While the appeal was thus pending, the parties entered into negotiations for a compromise and settlement of the litigation and suit, which resulted in the execution of the following instrument:
    
      i( Whereas, The said parties are now engaged in litigation concerning work done on the west side of East street, in the village of Green bush, the suit being now on appeal to the general term of the supreme court, and the said parties have agreed to compromise and settle the same; and the Boston and Albany Railroad Company affected by such suit, as owners of adjoining land, has, in furtherance of such compromise, and in consequence thereof, paid to the said village its share or proportion of the amount due, as fixed by compromise, and the village treasurer now pays the same to said Parr upon such compromise;
    
      “ This agreement witnesseth, that the said suit is for a valuable consideration, moving between the parties, compromised at the following sum, to be paid by said village to said Parr, or his attorneys : Balance recovery, $7,852.35, with interest thereon, from January 1, 1881 ; costs, $1,342.09, with interest thereon, from March 1, 1880 ; and that upon the payments of the amounts by the said village to said Parr, or his attorneys, said judgment will be_ paid and satisfied in full, and said Parr will execute a satisfaction thereof.
    
      “ That if the village do not pay the same within ninety days from this date, the appeal now pending shall be withdrawn by the village and the judgment stand for said amounts last named, and be enforced against the village for that amount.
    
      “ Statement, amount of compromise :
    “Recovery, as agreed upon, $14,895.27, and interest from January 1, 1881; costs, $1,342.09, and interest from March 1, 1880 ; amount paid by Boston and Albany Railroad Company, $7,148.53.”
    And the full amount thus agreed to be paid was immediately, after the execution of the agreement, paid to Parr. Thereafter, and on or about the 31st day of January, 1882, he commenced this action to recover damages of the defendant for its failure to perform its contract of December 20, 1870, to furnish the sand and gravel and do the grading. In his complaint he sets forth that contract, and alleges that the defendant neglected and refused to perform the work required of it by its terms, whereby he sustained great loss and damage, and was compelled and did, at the special instance and request of the defendant himself, grade the street and furnish the sand and gravel. And he demands judgment for $5,000, the amount of the liquidated damages.
    The answer denies the making of the contract and its breach by defendant and alleges that the plaintiff had failed to perform the same; denies that he at the request of the defendant had furnished the sand and gravel and done the grading as claimed; sets up as a bar the statute of limitations, the former recovery and, also, the compromise agreement and settlement above set out.
    The issues thus formed were brought to trial at a circuit before a judge without a jury. The judge found as matter of fact that the contract of December 20, 1870, was properly-made in writing under seal; that the two resolutions of September 30, 1873, were passed; that the defendant neglected and refused to furnish the necessary sand and gravel and to properly grade the street and wholly failed to perform the provisions of the contract in that respect; that the plaintiff could not fulfil on his part until the sand and gravel were furnished and the grading done; that he thereupon proceeded to perform on his part the provisions of the contract and the defendant accepted their performance and thereafter the plaintiff presented to the board of trustees his bills for the work done and materials furnished in flaging, paving and curbing the street and in grading the same, including the sand and gravel, which bills were approved by the board of trustees and admitted to be correct, but that the defendant refused to pay the bills or any part thereof; that the plaintiff thereupon commenced the action in the supreme court in which he finally recovered as hereinbefore mentioned; and that thereafter the compromise agreement was entered into; and he held that the judgment in the former action was not a bar to this action; that the settlement of the former suit and satisfaction of the judgment were, not a defense to this action and that the statute of limitations was not a bar thereto and he ordered judgment for the plaintiff for the amount of the liquidated damages.
    . He also found upon request of the defendant that about one-third of the bricks used by Parr in the performance of the contract were not of the quality required by the con-, tract and were unfit for paving purposes; that on or about September 13, 1873, Parr undertook to furnish the sand and gravel and do the grading in pursuance of. a resolution of the board of trustees and that Parr afterwards furnished the sand and gravel and' did the grading under and in pursuance of the resolution: and he found as matter of law, that the passage of the resolution of September 30, 1873, and the performance of the work and furnishing the sand and gravel by Parr pursuant thereto was an abandonment by mutual' consent of that portion of the contract of December 20, 1870, requiring the defendant to do the grading and furnish the sand and gravel and was in effect an .attempted alteration of the contract whereby the defendant was relieved from doing the work and furnishing the sand an;d gravel. The. judgment ordered for the plaintiff for the ■amount of the liquidated damages has upon appeal to the general term been affirmed.
    
      B. E. Andrews, for app’lt; E. Countryman, for resp’t.
    
      
       Reversing 5 N. Y. State Rep., 112.
    
   Earl, J.

We are of opinion that the compromise and settlement made by the parties on the 4th day of April, 1881, furnish a defense to tliis action. It was held in the .courts below that the compromise did not cover or embrace the claim upon which the plaintiff has recovered. We think it did. While the precise scope of the compromise agreement may not be entirely certain, it is our duty, interpreting all its language in the light of the surrounding circumstances, to give it that construction which is sustained by the best reasons and the greatest probabilities. It must be borne in mind that from the beginning there was a very sharp controversy and dispute between some of the trustees of the defendant and Parr as to the validity of the contract of December, 1870, and the manner of its performance. The defendant finally refused to pay for the work performed under the resolution and also under the contract, and when Parr brought suit to recover the amount claimed by him it-was vigorously contested for several years. It was decided in this court that he could not recover for the grading done and gravel and sand furnished under the resolution of the board of trustees adopted in September, 1873. Nevertheless he persisted in his claim to recover those items upon the subsequent trial before the referee, and while the referee decided that he was not entitled to recover for them, he reported in his favor for the amount claimed by him under the contract of December, 1870.

The defendant had evinced a determination to continue the litigation by its appeal to the general term. In attempting a compromise and settlement at that stage is it not probable that the parties would seek and intend to include in such settlement the entire controversy between them, and if they had not so intended that they would have embraced in the agreement some exception or reservation? It is not supposable that the defendant would have been willing to make the compromise and leave itself exposed to still further litigation upon the claim made in this action.

There is indeed every probability that the parties would intend to embrace in their compromise and settlement tire whole litigation and dispute between them, concerning the entire work done by Parr for the village in connection with the sidewalk. It was that litigation and that dispute which they compromised and settled. It appears from the agreement that the Boston and Albany railroad company, which was in some.. wayf interested in. the result of the litigation, as owner of land liable to be assessed for the work,- had paid its share and proportion, and the only reasonable presumption is that payment by it .was induced by the belief that the sum paid was its full share of the entire claim of Parr for work done and materials furnished. The amount paid by the defendant upon the compromise settlement is not of much significance in construing the agreement. It had not only resisted payment for the sand, gravel and grading, but also for the work done under the contract, and hence it appears that it refused even to pay the full amount of the judgment which had been entered against it. But whatever was paid was in settlement of the .suit and litigation, and in order to determine what was embraced in the suit and litigation it is necessary to read the complaint.

Suppose this compromise agreement had been made before any action had been commenced by Parr, and it had recited that it was in settlement and compromise of all Parr’s claims for materials furnished and work done for the defendant, and a sum less than the amount claimed had been paid to and accepted by Parr under that compromise and agreement, would not the amount so paid and received have been applied upon all his claims? Again suppose this precise agreement had been made while the case was still pending undecided before the referee, could it have been successfully claimed that the agreement and compromise did not embrace all the matters in dispute between the parties? We think not, and that for precisely the same reasons the compromise and settlement after judgment must apply to everything embraced in the judgment, not only, but also to everything embraced in the litigation and suit. The language should be so construed as to give effect to the presumed intention of the parties. It makes no difference that the claim now made is for the liquidated damages on account of the breach of the contract. If the plaintiff has received compensation for the work and materials which he furnished in order to enable him to perform his written contract, he cannot now recover damages of the defendant because it did not furnish the materials and perform the work.

We are, therefore, constrained to differ with the courts' below in their construction of the compromise agreement, and to hold that it furnishes a defense to this action. But, if we assume that the compromise agreement does not furnish a defense to the action, there is still another ground for holding that the action cannot be maintained. The plaintiff, standing upon the contract of December, 1870, could not put the defendant in default except by showing a .readiness and willingness to perform his part of the contract and demanding performance on the part of the defendant. There is no evidence whatever in the record showing that the plaintiff requested the defendant to perform its part of the contract or that it refused to do so. Therefore, in September, 1873, when the resolution was adopted which authorized the plaintiff to furnish the sand and gravel and do the grading, he had no cause of action against the defendant to recover damages for breach of the contract on its part. - If, however, the defendant had absolutely refused to furnish the gravel and sand and do the grading, its refusal alone would not have- authorized the plaintiff to furnish the materials and do the work. Ordinarily, when one party to a contract refuses to perform, that alone does not authorize the other party to go on with the contract and perform for the defaulting party.

If A contracts with B. to do the labor requisite for the construction of a house upon A’s land, who is to furnish the materials for that purpose, and A refuses to furnish the materials so that B can do the work, B is not thereby authorized to furnish the materials himself and go on and complete his contract. Without A’s consent B has no authority to enter upon his land, and B’s only remedy is an action for damages for breach of the contract by A. So here, if the defendant' refused to furnish the sand and gravel and do the grading and thus perform its covenants, the plaintiff had no right to enter upon the street and do the work and furnish the materials at the expense of the defendant. His only remedy was to stop there and bring an action for damages against the defendant for its breach of the contract.

There are cases where one party to a contract may furnish the work and the materials which the other party is bound to furnish and omits, upon request, to furnish, and where he may recover the expenses of furnishing them as damages for a breach of the contract by such other party. It is difficult, if not impossible, to define those cases by any general rule. It is sufficient to say that this is not one of them. Those cases are generally where one party to a contract has entered upon the performance thereof and the other party omits, upon request, to do something of no great importance, to be thereafter performed, before further progress can be made with the contract, and then the party anxious to perform does the work or furnishes the material which the other party ought to have done or furnished, and •in such case he may recover the expense of the work done and materials furnished as damages for a breach of contract by the other party.

Where the lessor has covenanted to repair and the lessee •enters into possession and repairs thereafter become necessary which the lessor refuses to make, the lessee may make them and recover the expenses of them as damages for breach of the lessor’s contract. But the cases must be very rare, if indeed there are any, where one party refuses to perform a condition precedent which stands in the way of any performance by the other party, and the latter party can, nevertheless, perform the condition and recover the expense of such performance as damages for a breach of contract by the other party. The law in such cases recognizes the right and power of one party to defeat performance of the contract by the other party and leaves him responsible for the damages he thus causes the other party, which damages are usually measured by the value to him of the contract thus practically destroyed. In other words a party may repudiate or break a contract while he cannot deny or destroy its obligations. Lord v. Thomas, 64 N. Y., 107. Therefore, in furnishing the materials and doing the grading, the plaintiff did nothing which he was authorized to do by virtue of his contract. But he alleges in his complaint that he did the work and furnished the materials at the request of the defendant, and the trial judge found that he did so in pursuance of and under the resolution of September, 1873, and that the passage of that resolution and the performance of the work and the furnishing of the materials by the plaintiff under and in pursuance of the resolution was an abandonment by mutual consent of that portion of the contract of December, 1870, which required the defendant to do the grading and to furnish the sand and gravel, and was in effect an attempted alteration of the. contract whereby the defendant was relieved from doing the work and furnishing the sand and gravel. In view of the allegations of the complaint and the findings of the trial judge, amply supported by the evidence, how can it be said that there was any breach of the contract on the part of the defendant? If it had requested some third party to furnish the materials and do the grading, even .under an illegal contract which did not bind it, yet the materials having been furnished and the work done, .he could not have alleged that it had broken its contract. Here performance by the plaintiff was substituted in the place of performance by the defendant. He furnished the sand and gravel and did the grading upon its request, and how and upon what theory can he now claim a breach of contract on its part? The materials were furnished and the work was done under a contract between him and it, and that was assented to by him in lieu of performance by it.

The only remedy thereafter left to him was an action to recover if he could, for the materials furnished and the work done under the implied contract. If it turned out that his contract was illegal and was not binding upon the village he was in the same position that any other person would occupy who had done work and furnished materials for the defendant under an illegal and void contract. The fact that he could not recover upon his contract of September, 1873, furnishes no reason for holding that he can recover for breach of his contract of December, 1870. The latter contract was not broken by the defendant. It simply caused that to be performed by the plaintiff. The limitation in defendant’s charter would be of little use if a party doing work for it under an illegal and void contract could still recover for the value of his work upon the theory of a breach of contract.

Therefore, in no respect of this case as it now appears did the plaintiff have a cause of action against the defendant to recover damages for a breach of contract.

The judgment should therefore be reversed and a new trial granted.

All concur (Andrews, J., on first ground), except Gray, J., who reads for affirmance, and Peckham, J., not sitting.

Gray, J.

(dissenting)—I think it proper to explain my dissent from the conclusions reached by a majority of the court by stating its grounds. I do not think that the instrument expressing the. agreement of the parties to compromise can be construed to cover the subject-matter of the present action.

The question presented is, what was settled by the terms-of that agreement. Not all claims and demands which the plaintiff might have against-the village of Greenbush;, for the instrument does not use such broad language.

The action then pending was to recover for the debt for the work done and materials furnished, and as to the sand and grading for which he* claimed therein, he was defeated; for this court had decided that the resolution was illegal on which plaintiff rested his right of recovery. The penal clause in the original contract, however, gave him a cause of action on a new and independent ground, on which he is able to place himself.

The agreement of compromise might, by the use of ordinary and usual words and phrases, have precluded any chance of plaintiff availing himself of other causes of actions, or demands, or claims; but the parties have not accomplished any such result. They covered the “ pending suit,” and by the word “litigation,” they must be held to have intended what that word simply and ordinarily means, namely: the act of litigating, or a judicial contest. Such a meaning cannot be extended in reason, and precludes the idea that other causes of action were composed by the agreement than what were then the subject of a judicial contest.

t-Tor am I able to agree in the second ground of Judge Earl’s opinion. The resolution of 1873 was illegally passed and there was no basis for a recovery against the village for the work done. But the defendant was in default for the non-performance of its agreement under the original ordinance, and the village is estopped from now saying, after it has suffered the defendant to go on and do what it hud undertaken to do, that he cannot recover on the penal clause of their agreement for want, on his part, of an offer to perform, or a demand that they perform.  