Arzani v. People, 149 N.Y.S.2d 38 (1956)

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149 N.Y.S.2d 38


Victor C. ARZANI, doing business under the assumed name and
firm name and style of Victor C. Arzani
Contracting Company, 2507 James Street,
Syracuse, New York, Plaintiff,
The PEOPLE of the State of New York; Maxim Kranz of 447 Fort
Washington Avenue, New York 33, New York; Lloyd S. Martin of
406 Fulton Street, Troy, New York; and The Lincoln National
Bank and Trust Company, of Syracuse, New York, Defendants.


Supreme Court, Onondaga County.


March 1, 1956.

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Byrne, Byrne & Lowery, Syracuse, for plaintiff. Thomas J. Lowery, Sr., and Thomas J. Lowery, Jr., Syracuse, of counsel.

Ainsworth & Sullivan, Albany, for defendants Maxim Kranz and Lloyd S. Martin. William J. Murphy, Albany, of counsel.

GORMAN, Justice.

Prior to July 31, 1954, the defendants Kranz and Martin, as a joint venture, entered into a contract with the State of New York to reconstruct a portion of the Geneva-Lyons State Highway. The contract was known as FARC 5464. By a written agreement dated July 31, 1954, the plaintiff agreed to perform as subcontractor certain work including the contract paving.

It has been stipulated that the total amount of the completed contract between the plaintiff and the defendant contractors is $130,491.43. It

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has also been stipulated that the plaintiff has been paid the sum of $106,477.30, leaving a balance of $24,014.13. It has been stipulated that the plaintiff is entitled to an additional amount of $844.59. The plaintiff further contends that the defendant Kranz orally promised to pay him one-half of the excess labor costs caused by union interference soon after the work commenced. The plaintiff has assigned all money due to him under the subcontract to the defendant bank.


The defendants Kranz and Martin have not made the final payment, contending that the above promise is not binding and that they are entitled to certain credits for lost aggregate. It has been stipulated that the defendants are entitled to a credit of $755.46 for certain charges and to a credit of $1,726.64 for extra cement.

The proposal issued by the State listed the minimum wage for laborers as $1.95 per hour, which amount was in effect when the plaintiff commenced work on his subcontract. A few days later, the union representative demanded an increase of twenty cents per hour or he would call a strike and shut down the job. The plaintiff says that he then told the defendant Kranz that he, himself, would pull off the job if Kranz did not agree to pay one-half of the additional labor cost, and that Kranz agreed. This testimony is uncontradicted. The plaintiff further stated on cross-examination that it constituted the entire conversation with Kranz and was not reduced to writing. The proof showed that the plaintiff thereafter paid his laborers the sum of $3,003.40 over the amount he would have paid at the lesser rate, and that the work proceeded to a satisfactory conclusion.

It is the contention of the defendant contractors that there is no enforceable contract between the interested parties as to this item because of failure to consideration. It is competent for the parties to a contract to abandon it or to substitute another in its place. Merger of the rescission and promise into one transaction does not destroy them as elements composing the transaction. See Schwartzreich v. Bauman-Basch, Inc., 231 N.Y. 196, 131 N.E. 887. But there must be a new consideration, and there is general acceptance in this state that where A is under a contract with B, a promise made by one to the other to induce performance is void. Consideration is not necessary to an act of rescission, waiver, release or discharge, but rather to the enforceability of executory promises. But it is necessary that there be a valid abrogation of the existing contract, and this by mutual agreement. This fact has not been established, whether the test be factual or legal.

It is true that this is not a situation where coercion or expediency has been utilized by the plaintiff in a mere attempt to exact more money. The conceded circumstances might spell out factually a mutual acceptance of immediate danger to the completion of one of interrelated

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contracts. But termination is not shown. The most that the plaintiff shows beyond the promise is his reliance upon his capacity to breach the contract, and his statement that he would do so if the excess labor cost was not shared. See McGowan & Connolly Co., Inc., v. Kenny-Moran Co., Inc., 207 App.Div. 617, 202 N.Y.S. 513. Judged from the standpoint of ordinary business morality, the situation of the promisor contractor may well be less defensible than that of the plaintiff. But termination is not presumed. It must be proved and upon this record the plaintiff has failed to sustain his burden.


Under the contract, the State of New York paid for 13,861.87 cubic yards of concrete. It appears that 26,075.22 tons of aggregate were bought and delivered to the stockpile. The plaintiff says that 25,268 tons of aggregate were delivered to the batching plant site. It was necessary to use 20,167 tons of aggregate to mix 13,862 cubic yards of concrete. The plaintiff testified that 1,399 tons of aggregate went into extra depth of concrete. Some was used to replace coring. The average depth of the completed concrete pavement was concededly 9 1/2 inches. The plaintiff has credited the defendants with the extra concrete over 9 inches plus 45 tons used in rejected pavement.

There was necessarily a 6 inch blanket of aggregate covering the one acre batching plant site in lieu of planking. This was left upon the site after completion of the job, and pursuant to the least was bulldozed away to clear the leased land some three weeks later, together with 100 tons of unused aggregate ordered by the State engineer. Another 800 tons of unused material were left in the stockpile. The proof indicates abandonment of these items by the parties. Including moisture, these figures account for approximately 3000 tons of the disputed mathematical discrepancy.

The subcontract is somewhat unusual. The contractor says this was due to the subcontractor’s financial circumstances. Under all of the proof, it is not unreasonable to infer that the defendants were mere brokers in the entire transaction. Whether they were reasonably qualified to act and so acted in their own performance does not sufficiently appear. It is thought that they should be credited with the 2,100 tons of aggregate which are unaccounted for under the plaintiff’s figures. This amounts to $2,856. Plaintiff is entitled to judgment in the amount of $19,520.62.

The foregoing constitutes the written and signed decision of the court. Civil Practice Act, ยง 440.

Let judgment be entered accordingly.

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