Jacob & Young (P) built a country residence for Kent (D) at a cost of about of $77,000, and now is suing to recover a balance of $3,483.46, remaining unpaid.
-The work of construction ceased in June, 1914, and the Defendant then began to occupy the dwelling.
-There was no complaint of defective performance until March, 1915.
-One of the specifications for the plumbing work provides that “All wrought-iron pipe must be well galvanized, lap welded pipe of the grade known as ‘standard pipe’ of Reading manufacture.”
-The D learned in March, 1915, that some of the pipe, instead of being made by Reading, was the product of other factories.
-The Plaintiff was accordingly directed by the architect to do the work anew (start over again). -Obedience to the order meant more than the substitution of other pipe.
-It meant the demolition at great expense of substantial parts of the completed structure.
-Plaintiff left the work untouched, and asked for a certificate that stated the final payment was due.
-Refusal of the certificate was followed by this suit.
-Other than different brands, the pipes that P installed and one that D wanted had no other material differences in quality. Also, there was no evidence of fraud or bad faith on the part of P.
PROCEDURAL HISTORY -Trial court denied the admission of evidence which distinguished Reading pipe from Cohes pipe and other brands. Moreover, even the Defendant’s architect, though he inspected the pipe upon arrival, failed to notice the discrepancy.
-A verdict was directed for the Defendant. The Appellate Division reversed, and granted a new trial.
-Is a Plaintiff owed money for substantial performance?
-The court reasoned about what is important and trivial, when it comes to not following the exact terms of the contract.
-The court held in this case that the measure of the allowance is not the cost of replacement, which would be great, but the difference in value, which would be either nominal or nothing.
-The court also made an analogy by stating “Specifications call, let us say, for a foundation built of granite quarried in Vermont.
-On the completion of the building, the owner learns that though the blunder of a subcontractor part of the foundation has been built of granite of the same quality quarried in New Hampshire.
-The measure of allowances is not the cost of reconstruction.
-Furthermore, when the defect is insignificant, the court will find that there was substantial performance and excuse the breach of using the same type and quality of pipe which parties had agreed were the same except for the brand name.
-The measure of damages is not the cost to rip out the old pipe and install a new one, but the difference in value, which in this case is zero.
-The dissent disagreed with majority’s decision by stating that the defendant specified in the contract exactly what he wanted and that he was entitled to that. The failure to perform was either intentional or due to gross negligence.
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