Summary
In Matter of Carter (21 App. Div. 118), which was an accounting to which the plaintiff in the present action, his assignor and the defendant assignee were parties, this agreement was under consideration.
Summary of this case from Vandegrift v. Cowles Engineering Co.Opinion
October Term, 1897.
H.G. Harris, for the appellants.
William H. Shepard, for respondent Carter.
H.C. Closson, for respondent Bacon.
The general assignment made by the Cowles Engineering Company did not, per se, constitute a breach of the contract for the construction of the steamer. ( New England Iron Co. v. Gilbert El. R.R. Co., 91 N.Y. 153.) It undoubtedly established the insolvency of the company. But mere insolvency does not constitute a breach of contract, nor does it amount to a rescission of the same. ( Pardee v. Kanady, 100 N.Y. 121.) It is quite possible that the assignment, together with the acts of the assignors, the assignee, and of the creditors, coupled with the circumstances which thereafter existed, would make a case showing an intent to abandon the contract, or such an inability to complete it in accordance with its terms as would justify the finding of its breach at the time when the assignment was made. Standing alone it would not necessarily have that effect. The corporation continued to exist. It had the capacity to sue, and also of being sued. It could still conduct its business if it had the means, and its assignee was not prohibited by anything contained in the contract or in the assignment from completing the vessel. It was, therefore, possible for the company or its assignee to complete the construction of the vessel in accordance with the terms of the contract. By the terms of the contract the vessel was to be completed on the 22d day of August, 1893. There were, however, two contingencies in which the contract might be changed, so far as the date of completion is concerned; one was that if strikes intervened, within the clause providing therefore, the time was to be extended. There is nothing in the record before us to show that the company was not delayed on account of strikes, and, therefore, excusable for not having the boat completed upon the date fixed for completion. It was also contemplated that the boat might not be completed on the specified date, although there was no delay from strikes. If she was not completed within two months of the specified time, then it rested with the Interstate Steamboat Company to accept or reject as it chose. It comes, therefore, to the fact that no breach of the contract can be said as matter of law to have been occasioned by the assignment, or that no breach of the contract was occasioned by the failure to have the boat completed on the twenty-second day of August. If none of these things constituted a breach of the contract, then it follows that there was no breach made by the Cowles Engineering Company. At least upon a trial it might be so found. It still had the time in which to complete, and may have had the ability. It was possessed of the right if it had been guilty of no breach. The title to the boat remained in the Cowles Engineering Company until transferred to the assignee ( Andrews v. Durant, 11 N.Y. 35), and remained thereafter in him until he sold his interest. While the boat was owned by the assignee, the Interstate Steamboat Company forcibly took possession of and towed her away. If the right still existed in the Cowles Engineering Company, or its assignee, to complete the construction, which we neither affirm nor deny, then this act upon the part of the Interstate Steamboat Company constituted a breach of the contract, and of such a character as deprived the Cowles Engineering Company or its assignee of the ability to perform it according to its terms. If there was no breach of the contract by the Cowles Engineering Company or its assignee, and they were deprived of the power to complete the boat by the act of the Interstate Steamboat Company in taking it away, then no liability would exist upon the part of the Cowles Engineering Company to respond in damages, and there would be no basis for claiming a return of the money paid upon the contract. It would also follow that there was no breach of the conditions of the bond, and in consequence no liability upon it.
We may look at this matter from another point of view. Assuming that there was a breach of the contract by the Cowles Engineering Company, this gave the Interstate Steamboat Company no right to forcibly seize and take the boat. It belonged to the assignee. Undoubtedly the Interstate Steamboat Company would have had a claim for damage arising out of the breach of the contract, and might not have been limited to its action upon the bond. By reason of the existence of its claims it might have invoked legal remedies which would have reached the boat and secured the claim. It could not, however, forcibly seize and take away the boat and still have left intact its claim for the money paid for its construction. Its right was to recover such damages as it had sustained by reason of the breach of the Cowles Engineering Company, which might be more or less than the sum which it had paid. The same right existed with respect to the liability created by the bond; the damages secured to be paid thereby were unliquidated, and proof would be required to establish the amount. ( Noyes v. Phillips, 60 N.Y. 408.)
It is quite evident from the discussion which has thus far been had, that upon the present record the court is unable to determine what the respective rights of the claimants and the assignee are, or what the Interstate Steamboat Company or Vandegrift is entitled to receive, if anything. It is not necessary that we proceed beyond this point with this branch of the case, except to say that it does not conclusively appear that either the Interstate Steamboat Company or Vandegrift, or either of them, is entitled to recover or receive anything of the assignee. Whatever be their rights, which we do not determine, they rest in an unliquidated claim.
It does not appear that any claim as contemplated by the statute was ever made and filed with the assignee by either claimant, so that the assignee has not been called upon either to allow or reject the claim. The right existed in the claimants to file such claims with the assignee, and if he disputed the amount or rejected the claim, provision is made for having the same established. (1 R.S. [Birdseye's 2d ed.] § 26, p. 147.) The assignment was made nearly four years ago, and the parties have had an abundance of time in which to have procured the liquidation of their claims. They have thus far refused, and now seek to have the same determined upon an accounting by the assignee, and upon a record which is manifestly insufficient for the purpose. The attempt to do this at the present time is calculated to hinder and delay other creditors who are entitled to a share of the fund, and who may not be paid until after a long litigation, which in this case would undoubtedly eat up the whole estate in the expense of the contest. Claims of creditors under such circumstances should be rejected, and the creditors be remitted to their remedy against the assignor. ( Matter of Adams, 15 Abb. N.C. 61; Matter of Ives, 25 id. 63, 76; People v. St. Nicholas Bank, 151 N.Y. 593. )
As to the other questions raised by the appellant, it is sufficient to say that all the parties interested have acquiesced in the decree of distribution as it has been entered, and as the appellants are without interest therein, they cannot now be heard to complain of its provisions.
The decree should be affirmed, with costs, payable by the appellants personally.
All concurred, except GOODRICH, P.J., not sitting.
Decree affirmed, with costs against the appellants.