Trainor Co. v. Aetna Casualty & Surety Co., 290 U.S. 47 (1933)

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Trainor Co. v. Aetna Casualty & Surety Co.

No. 13

Argued October 12, 1933
Decided November 6, 1933
290 U.S. 47

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE THIRD CIRCUIT

Syllabus

1. Upon default after partial performance of a building contract, the measure of damages recoverable by a mortgage-obligee on a bond guaranteeing completion, is the difference between the value, at the time of default, of the property with the building uncompleted and the value it would have had with the buildings completed, not exceeding, however, either the amount due on he mortgage or the amount of the bond. Pp. 53, 55.

So held although the value of the property with the buildings uncompleted at the time of the guarantor’s default, exceeded the sum of the mortgage and all prior liens, it appearing that the mortgage-obligee, because its mortgage was not then due, was unable to protect itself by foreclosure; that thereafter the property steadily declined in value, and that its interest was subsequently wiped out by foreclosure of a prior lien.

2. This is the settled rule in Pennsylvania. P. 53.

3. Even though the federal court, in determining questions of general law, may exercise an independent judgment, yet, for the sake of harmony and to avoid confusion, they will lean, where the question is balanced with doubt, towards an agreement of views with the state courts. A fortiori where the decisions of the state courts are plainly right. P. 54.

62 F.2d 487 reversed.

Certiorari, 289 U.S. 718, to review a judgment affirming a judgment of the District Court, 49 F.2d 769, awarding nominal damages in a suit on a guaranty bond.