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McGraw v. Johnson

Decided: October 24, 1956.

WILLIAM F. MCGRAW AND ANNA E. MCGRAW, HIS WIFE, PLAINTIFFS-APPELLANTS,
v.
OSCAR JOHNSON AND WALTER A. COOK, DEFENDANTS-RESPONDENTS



Goldmann, Freund and Conford. The opinion of the court was delivered by Goldmann, S.j.a.d.

Goldmann

Plaintiffs sued defendant Johnson for damages resulting from his alleged breach of a building contract, and defendant Cook for his alleged willful and deliberate interference with the completion of that contract. At the close of the entire case the county district court judge granted Johnson's motion for a directed verdict of $57 in favor of plaintiffs and against him, and also granted Cook's motion for a directed verdict in his favor against plaintiffs. An accordant judgment was entered and this appeal followed.

On August 25, 1952 plaintiff William F. McGraw entered into a contract with defendant Johnson, a contractor, for the construction of a dwelling on plaintiffs' lot in Park Ridge, N.J., for $15,300. The agreement did not provide for a completion date in view of the fact that McGraw first had to procure a Veterans' Administration guaranteed mortgage loan. The loan was granted in January 1953. Johnson began work on February 10 and told McGraw that construction would take about four months. There was further talk about the completion date as the work progressed. Johnson first promised the house for August 1, and finally for September 1. McGraw testified he had explained to Johnson that he and his wife would have to give 30 days' notice of intention to vacate their apartment, and Johnson assured him he had nothing to worry about and that the house would be finished on September 1.

The architect testified that the work progressed very well up to August 15, without complaint. There was no unreasonable delay and the house was built in a good and workmanlike manner. By that date it was "99 1/2% completed," to use the language of plaintiffs' counsel. A few very minor details, which would have cost only $57, required attention; in addition, a water meter had to be installed and a toilet bowl connected. The latter item would have cost $10 and taken no more than an hour or two of any plumber's time; all the items together required no more than a day to do.

McGraw said the house was fit to live in on August 15; "there was hardly anything to do" except for connecting up the toilet. Plaintiffs testified that they repeatedly requested Johnson to finish the work, but he failed to do so. The toilet was not connected until just before they moved in on December 11, by which time the necessary certificates had been obtained from the local board of health and the building inspector. Plaintiffs also testified they had met defendant Cook, the plumbing subcontractor, at the dwelling site on August 15. The topic of conversation was the unconnected toilet bowl. Cook complained he had not been paid, and their reply was that he look to Johnson for satisfaction. (We were informed at oral argument that there was more than $1,000 balance then owing from Johnson to Cook for plumbing work.) Apparently the discussion generated some heat, with Cook allegedly saying, "No one is going to move into this house until I say so," and that "he didn't care, he wanted to get paid." There was no subsequent conversation or contact between plaintiffs and Cook.

It is clear from the record that on August 15, the beginning of the alleged delay in completing construction, McGraw was behind in his payments to Johnson. He was scheduled to make the third of four payments under the contract, $4,400, when plastering was finished. This work had been completed in July. McGraw's explanation of his failure to make payment was that Johnson made no request therefor. His testimony shows that he and Johnson did talk about payment sometime in August, for he said Johnson told him that the plumber wanted to be paid. McGraw answered that he and his wife would go to the bank on September 1 to pick up the installment due them under the loan agreement. When they did, they learned that Cook had filed a notice of intention and that the money would not be released by the bank until the lien had been cleared.

However, plaintiffs actually had $4,400 of their own with which they could have paid Johnson, thus putting him in a position to pay Cook and to complete whatever

work was necessary. We note this matter simply for the purpose of showing that plaintiffs in good conscience have no reason to complain against Johnson. We recognize, of course, that their failure to pay the third installment did not excuse complete performance by Johnson. The contract here was entire, although payment was to be made in installments at fixed and ascertained times during the course of construction. The covenant to make payments in such a case is treated as an independent one. While its breach gave Johnson a right of action thereon, it did not excuse his non-performance. Magliaro v. Modern Homes, Inc. , 115 N.J.L. 151, 155 (E. & A. 1935).

In connection with this incidental discussion of payment of the third installment, it would be well to note our disagreement with plaintiffs' contention that the trial court erred in refusing to admit into evidence a letter sent to McGraw on January 28, 1953 by the lending institution, informing him it had approved of a construction loan, subject to Veterans' Administration guarantee, to be paid in three installments according to the schedule enclosed therein. Defendant Johnson knew of this letter at the time he began work. Plaintiffs' intention in offering the letter was, obviously, to tie Johnson to the schedule of payments under the loan agreement. They thus sought to modify their contract with Johnson, calling for a different schedule of payments. This they could not do without definite proof of his concurrence in that schedule. Such proof was not forthcoming.

Plaintiffs also complain that the trial court fell into error in refusing to permit them to prove their "out-of-pocket" disbursements, namely, monies they claim they were obliged to expend for room rent at a local hotel from October 15 to December 10 while they were awaiting the completion of their home, and for meals eaten and a small item of carfare. Their argument in support is that the house was not completed within a reasonable time, that this ...


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