"A contract to make and execute a certain written agreement, the terms of which are mutually understood and agreed upon, is in all respects a valid and obligatory contract, when no statutory objection interposes, as the written contract itself would be, if executed. If, therefore, it should appear that the minds of the parties had met, that a proposition for a contract had been made by one party and accepted by the other, that the terms of this contract were in all respects definitely understood and agreed upon, and that a part of the mutual understanding was that a written contract embodying these terms should be drawn and executed by the respective parties, this is an obligatory contract, which neither party is at liberty to refuse to perform."

In the present case there is no element essential to a complete contract which is not to be found in the letters which passed between the parties. The work to be done and the materials to be furnished were identified by reference to the architect's plans and specifications, and it is not contended that there was any doubt or ambiguity on this score. The price to be paid by plaintiff was fixed. The stipulation as to the source from which defendant was to obtain a certain part of the material was included in the proposal, as was also a precise stipulation as to the security which the defendant was to give for the performance of the agreement. There was no element lacking in any wise essential to a complete contract, and there is nothing to be found in either letter suggesting that any contract stipulation remained to be agreed upon in the future. That a formal contract was not tendered by plaintiff is quite unimportant, and seems to have been so considered. by both of the parties. It is true that one of defendant's agents testifies that he, on several occasions, asked plaintiff when the formal contract would be ready; but there is nothing in the case to show that the defendant ever demanded or insisted upon the formulation of such a contract, and it is very significant that, when defendant determined to withdraw from his agreement, he did not base his refusal to perform upon plaintiff's neglect to tender a formal contract for execution, but placed it solely and exclusively upon the ground that the price of steel and iron had advanced so that it would be unprofitable to do the work at the price proposed.

It is true that reference is made by the defendant to the length of time which had elapsed since the exchange of letters; but the defendant does not base his refusal to perform the work on the ground of delay, but solely upon the advance in price. As to the delay in ordering deliveries, it does not appear that it was unreasonable, and we do not understand the defendant as seriously claiming that it was. The defendant knew, when he made the proposal, what the general character and size of the building was to be, and doubtless realized that the demand. for steel would depend upon the preliminary or preparatory work which plaintiff, as general contractor for the building, might be required to do, before he could begin to use steel or iron on the structure. From the letters themselves, the circumstances under which they were exchanged, and the subsequent acts of the parties, we think that the jury were quite justified in finding that the parties intended to make, and understood that they were making, a valid binding contract by the letters which they exchanged in February, 1898, and that defendant's present contention that the agreement was merely tentative, and not intended to become effective until a more formal contract had been

and 136 New York State Reporter

entered into, is a mere afterthought, put forth as an excuse for receding from an agreement which it had become unprofitable to fulfill. We are of the opinion that the court committed no error in permitting plaintiff to prove what it actually cost him to do the work for which defendant had contracted. Mayor, etc., v. Second Avenue R. R. Co., 102 N. Y. 572, 7 N. E. 905, 55 Am. St. Rep. 839.

When defendant had refused to proceed with the work, it became plaintiff's duty to proceed with reasonable and usual diligence to procure the work to be done as cheaply as possible, so as to limit the claim for damages. Whether or not he did so proceed was a question for the jury. It was fairly submitted to them, and we find no reason in the evidence to question the justness of their conclusion. The plaintiff was under no obligation, as we consider, to accept defendant's offer to do the work at an advance of $38,000. When that offer was made, plaintiff was in the position of claiming, and with reason, that defendant was bound to do the work under his former proposal. At the very least, that was then a debatable claim, not without a plausible basis. Plaintiff expressed his complete willingness to accept a new proposal from defendant at a higher figure, conditioned only upon the mutual understanding that such acceptance should not be construed as a waiver of any right which he might then have under the earlier proposal and acceptance. This was a reasonable condition, and one which it was unreasonable for defendant to refuse, and his submission of a new proposal without reference to the proposed conditions must be deemed a refusal to accede to it.

No other question presented by the appeal seems to call for extended discussion.

The judgment and order should be affirmed, with costs. All concur.

(116 App. Div. 816)

GRAY v. BUTLER et ux.

(Supreme Court, Appellate Division, Second Department. January 18, 1907.) HUSBAND AND WIFE-SEPARATION AGREEMENT-VALIDITY.

Under Domestic Relations Law, Laws 1896, p. 220. c. 272, § 21, providing that a husband and wife cannot contract to dissolve their marriage or relieve the husband from his liability to support his wife, an agreement, in the guise of a separation agreement, to secure to the wife a legal division of the husband's property, by which the wife agreed to accept certain payments, in satisfaction for support and maintenance, and to release him from all claims upon his personal property, was void where there was no separation and none was contemplated, when the contract was executed.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 26, Husband and Wife, § 1046.]

Appeal from Special Term, Kings County.

Action by James M. Gray, as trustee, against Orlando W. Butler and Annie Butler. From a judgment for defendant Orlando W. Butler, plaintiff and defendant Annie Butler appeal. Affirmed.

Argued before HIRSCHBERG, P. J., and WOODWARD, JENKS, RICH, and MILLER, JJ.

Herbert T. Ketcham (James M. Gray, on the brief), for appellants.

Carlton B. Pierce, for respondent.

RICH, J. This action was brought to enforce the provisions of a separation agreement executed at a time when defendants were living together as husband and wife; that relation continuing for more than six months thereafter. The agreement was kept a secret, and to all outward appearances there was no change in the relations of the parties, who continued to live together the same as they had done before. The learned justice presiding at the trial has found upon sufficient evidence that it was not the purpose of either spouse at the time of executing the agreement to live separate and apart. Under these circumstances such a contract cannot be enforced in equity. Westmeath v. Salisbury, 5 Bligh, 338; Zimmer v. Settle, 124 N. Y. 37, 26 N. E. 341, 21 Am. St. Rep. 638; Carson v. Murray, 3 Paige, 483-501; Hughes v. Cuming, 36 App. Div. 307, 55 N. Y. Supp. 256. It is urged, however, by the learned counsel for the plaintiff that, in view of another finding that "the sole purpose of the execution of the agreement was to secure to the wife a legal division of the property of the husband," the case of a valid and enforceable agreement between the parties is presented. We are unable to concur in this view. The domestic relations law (section 21, c. 272, p. 220, Laws 1896), provides:

"A married woman has all the rights in respect to property, real or personal, and the acquisition, use, enjoyment and disposition thereof, and to make contracts in respect thereto with any person including her husband,

* but a husband and wife cannot contract to alter or dissolve the marriage or to relieve the husband from his liability to support his wife." This is precisely what the parties to this agreement sought to do. In consideration of certain payments proposed to be made by the husband, his wife agreed to accept the same in full satisfaction for her support and maintenance, and to relieve him from any and all claims she may have upon his personal property, and the trustee on his part agreed to save the husband free from all debts due or payments incurred by the wife. Such an agreement under the guise of a separation agreement is in contravention of the statute and void. I am not unmindful of the recent decision of this court (Reardon v. Woerner, 111 App. Div. 259, 97 N. Y. Supp. 747) in which it was held that an action would lie to enforce the condition of a contract of separation, but that case is distinguishable from this, in that the husband and wife had actually separated and the contract was made to insure the support and protection of the wife, while in the case at bar there was no separation and none was contemplated when the contract was executed. The judgment must be affirmed, with costs. All concur.

(52 Misc. Rep. 220).

and 136 New York State Reporter

KORN v. CAMPBELL.

(Supreme Court, Special Term, New York County. November, 1906.) DEEDS RESTRICTIONS-ENFORCEMENT.

A grantor conveyed a tract of land by a deed containing a covenant against nuisances, which restricted the use of the premises to the erection of first-class private residences. Subsequently the premises were divided, and thereafter dwelling houses were erected thereon which were used as private residences. Held, that the premises were subject to the covenant in the deed, and an owner of a part thereof was entitled to enforce it against an owner of another part, unless there had been such a change in the character of the neighborhood as to defeat the object of the covenant, and to render it inequitable to compel the owner to limit the use of his property for private residences only.

[Ed. Note. For cases in point, see Cent. Dig. vol. 16, Deeds, §§ 543, 544.] Action by David Korn against Georgine Campbell. Judgment for plaintiff.

Albert T. Sharps, James L. Bishop, and James Frank, for plaintiff.

David B. Ogden and Francis C. Huntington, for defendant.

NEWBURGER, J. Plaintiff is the owner of No. 924 Madison avenue, while the defendant is the owner of No. 922, and the buildings erected upon the premises are known as private dwelling houses. The defendant is about to alter the building No. 922, and has filed with the building department plans which contemplate such changes as to permit the lower part to be used for stores, and the first floor above the basement for office purposes; and, as defendant testified, the alterations were for the purpose of letting the building for business purposes. This action is brought to restrain the defendant from making such alterations as being in violation of a restrictive covenant imposed upon said property.

James Lenox on the 10th day of August, 1870, conveyed to one Lalor premises on the northwest corner of Madison avenue and Seventy-Third street, being 195 feet on the northerly side of Seventy-Third street from the corner of Madison avenue and 102 feet 2 inches on the westerly side of Madison avenue, from the corner. The deed contained a covenant against nuisances, which provided, among other things:

"Not to permit any trade or business whatsoever which may be in anywise noxious or offensive to the neighboring inhabitants, but will use, or suffer the said premises to be used, for the erection of first-class private residences only."

Subsequently the premises were divided, and thereafter dwelling houses were erected, and are now standing and used as private residences, with the exception of three properties further west on SeventyThird street, which have been torn down and are now occupied by other private houses. The property of the plaintiff and defendant is still subject to the covenants in the deed from Lenox to Lalor. See Raynor v. Lyon, 46 Hun, 227. It has been repeatedly held that courts of equity will enforce such covenants, unless there has been such a

change in the character of the neighborhood as to defeat the object and purpose of the agreement, and to render it inequitable to deprive such owner of conforming his property to that character. It appears from the stipulated facts (Exhibit 3) that all the property upon both sides of Seventy-Third street and Seventy-Fourth street, from Fifth avenue to Park avenue, is used for private residences only, and the evidence wholly fails to disclose any change in the immediate neighborhood. The contention of the defendant that by reason of the change of the motive power of the railroad on Madison avenue the property cannot be as profitably sold or rented is not borne out by the evidence.

Judgment for plaintiff. Findings signed.

(116 App. Div. 744)

FULTON v. SEWALL et al.

(Supreme Court, Appellate Division, Second Department. January 11, 1907.) PRINCIPAL AND AGENT LIABILITIES AS TO THIRD PERSONS-ACTION-INSTRUCTIONS.

Where it appeared that defendants agreed to pay plaintiff a certain sum for inducing Italian workmen to emigrate to the Hawaiian Islands, and it appeared that defendants were acting as agents for a sugar planters' association composed of individuals residing in the Hawaiian Islands. and that such agency was known to plaintiff, an instruction that persons, though contracting only as agents, are generally liable where there is no responsible principal to resort to, and that, if the jury believed that the sugar planters' association was not legally competent to make a contract or liable to be sued and defendants knew such fact and plaintiff did not, defendants would be liable as principals, was erroneous; there being no question of an agent contracting for a sham principal, and the fact that the association was not incorporated not rendering the agents liable.

Appeal from Trial Term, Kings County.

Action by Andrew J. Fulton against Oscar T. Sewall and others. Appeal by defendant Sewall from a judgment in favor of plaintiff and from an order denying a motion for a new trial. Reversed, and new trial granted.

Argued before HIRSCHBERG, P. J., and JENKS, HOOKER, MILLER, and GAYNOR, JJ.

I. R. Oeland, for appellant.

William G. Cooke, for respondent.

MILLER, J. The defendant Sewall appeals from a judgment entered on the verdict of a jury and from an order denying a motion for a new trial in an action brought to recover damages for the breach of a contract, whereby it is claimed the defendants agreed to pay the plaintiff the sum of $2 for each Italian workman whom he should induce to emigrate to the Hawaiian Islands.

It appeared that the defendants were engaged in a general shipping and commission business, and were the representatives in this country of the Hawaiian Sugar Planters' Association, an unincorporated association, composed of the sugar planters of the Hawaiian Islands, who