Dock Contractor Co. v. City of New York

Decision Date07 January 1924
Docket Number48.
PartiesDOCK CONTRACTOR CO. v. CITY OF NEW YORK et al.
CourtU.S. Court of Appeals — Second Circuit

George P. Nicholson, Corp. Counsel, of New York City (John F O'Brien and Willard S. Allen, both of New York City, of counsel), for city of New York.

Warren Leslie, of New York City (Martin Conboy, of Riverdale-on-Hudson, N.Y., and Harry W. Alden and H. A Butler, both of New York City, of counsel), for Dock Contractor Co.

James L. Quackenbush, of New York City (Henry J. Smith and Albert J. Kenyon, both of New York City, of counsel), for Interborough Co.

Before ROGERS, MANTON, and MAYER, Circuit Judges.

MANTON Circuit Judge.

On these writs of error the parties will be designated as below plaintiff and defendants.

The plaintiff contracted with the city of New York, the latter acting through the Public Service Commission of the First District, and the Interborough Rapid Transit Company, on September 27, 1915, for the construction of a part of the Eastern Parkway Rapid Transit Railroad, route No. 29, section 2, to be built on Nostrand avenue, in the borough of Brooklyn, city of New York. It completed its full obligation in the performance of this contract work. Claiming a breach of the contract on the part of the city of New York and the Interborough Rapid Transit Company, it seeks to recover damages in this action. On the trial, the plaintiff's charge of the breach was that in constructing this railroad it underpinned, as required by the contract, 5,629.41 lineal feet of adjoining buildings, and that it has not been paid the contract price of $85 per lineal foot of building for such underpinning. The city of New York did pay for 935 feet of underpinning. Of the 4,694.41 lineal feet unpaid for, the plaintiff has recovered for 2,795.41 lineal feet found by the jury to be necessary work under the contract, and under a charge which submitted this question of necessity for underpinning as one of fact. The court ruled that the city of New York was not liable for the balance of the work. The complaint was dismissed as against the Interborough Rapid Transit Company. Both the contractor and the city of New York have been allowed writs of error. The city of New York's contention is that the contractor is entitled to no recovery whereas the contractor contends that it is entitled to full recovery for the full number of lineal feet of houses underpinned.

Upon this writ the city of New York contends that, if either of the defendants is responsible, judgment should go against the Interborough Rapid Transit Company to the extent of the unpaid balance owing by the Interborough Company on the contract providing for the construction of this subway. Both contract No. 3 and the contract in suit were made under the authority of the Rapid Transit Act (chapter 4 of the Laws of 1891). Under contract No. 3 the city of New York agreed to construct the railroads, including section 2, route 29, and the Interborough Company, which is referred to in contract No. 3 as the lessee, agreed to contribute toward the cost of construction. The limit of its liability was $58,000,000. The Interborough Company established that its contribution under contract No. 3 had already been exhausted without consideration being given to any liability for future payments under section 2, route 29, of the contract. If this be true, then, under article 12, contract No. 3, if a recovery were had against the Interborough Company, it would mean that the Interborough Company could make a demand on the city of New York to settle and pay the claim of the plaintiff as embodied in any judgment against the Interborough Company, and it would be the obligation of the contract for the city of New York to pay it. Assuming that the contribution was not exhausted, the Interborough Company would then be obligated to make its full contribution of $58,000,000 under contract No. 3. But the city of New York must pay the entire balance of the cost of construction, whatever that may be, and, in the end, the Interborough Company is not obligated to do more than meet its contribution.

The Rapid Transit Act vests in the Public Service Commission, acting for the city of New York, the entire control of laying out routes and general plans for municipal rapid transit railroads and adopting detailed plans and specifications therefor; also preparing advertising, and awarding construction contracts and enforcing these contracts so awarded, except as certain of these powers and duties were vested in the board of estimate and apportionment and in the corporation counsel or other agents of the city of New York. The corporation counsel of the city of New York must approve the contract as to form; the board of estimate and apportionment must consent to the contracts and make an appropriation before they were executed. The Commission, acting for the city of New York, has charge of acquiring the lands, easements, and rights of way for rapid transit purposes by condemnation proceedings or otherwise. The Interborough Company is excluded from these functions, and section 58 provides that 'any such railroad shall be and remain the absolute property of the city. ' The city of New York is to have sole supervision and direction of construction; the Commission acting for the city of New York prepares advertisements and awards the contracts; the Interborough Company has the right to make suggestions as to the form of contract, which may be disregarded by the Commission, whose decision is final and binding. The Commission determines which construction contracts the Interborough Company shall be made a party to for the purpose of distributing its contribution, and the maximum amount for which the Interborough Company shall be liable under each of such contracts. The Commission could not compel the Interborough Company to enter into any contract which, with its other commitments, would cause its maximum contribution of $58,000,000 to be more than exhausted.

Article 35 provides that the contractor shall look to the Interborough Company for the payment of the sums earned upon this contract to an amount up to but not exceeding $1,607,752.17, which the Interborough Company agrees to pay at the time and in the manner and upon the terms and conditions provided, and to the city of New York for all sums over and above such amount; the Interborough Company is not liable thereunder beyond this amount. Articles 35, 37, and 38 incorporate the terms and conditions as to the payments and conditions relative to the manner of payments which article 9 of contract No. 3 requires to be incorporated in all construction contracts to which the Interborough Company is made a party for the purpose of disbursing part of its contribution. It is thus obvious that the contract is a city contract for the construction of a city-owned railroad for the benefit of the city of New York, under the supervision and direction of the city's agents and under contracts prepared, advertised, and awarded by the Commission acting for the city of New York, as provided in the Rapid Transit Act. The security given by bidders ran solely to the city of New York, and the right of action against any bidder to whom the contract might be awarded, who failed to sign the contract, is given solely to the city of New York. The city, by the Commission and its engineer, has complete control over the making of the contract and the vouchers for payment, and the Commission has a right in its discretion to require the Interborough Company, instead of paying over its contribution under the contract here in question to the contractor, to apply such contribution or any part thereof to other purposes, such as replenishing the security held by the city of New York or satisfying a claim of the city of New York against the contractor for liquidated damages, or paying the expenses of completing the work in the event of the contractor's default, through other city agents or contractors. We regard the city of New York responsible for the breach of contract established here, and hold that no error was committed in dismissing the complaint as against the Interborough Rapid Transit Company.

Section 2, route 29, provides for a two-track underground subway extending under Nostrand avenue from a point near Church avenue to a point near Flatbush avenue, a distance of 6,610 feet. The subway structure is of steel bents and concrete. The work was to be prosecuted by open cut method of excavation. The width and depth of the cut was sufficient to accommodate a subway structure as well as to permit the contractor to relocate the sewers, pipes, and sub-surface structures. It was provided in the contract that the sides during construction, would be maintained by suitable methods of sheeting and bracing. Vertical wooden sheeting was driven down on each side of the cut, and as the sheeting was driven down the material between the two lines of sheeting was removed. This sheeting was braced from side to side by transverse braces which would hold the sheeting against the bank on either side. The contractor conceded by the provisions of the contract, as well as the specifications and drawings that, if the work was done without fault or negligence on its part, it did not involve any danger to adjacent buildings, and it provided that it would, at its own expense, make good any damage to such buildings. It further provided that the liability of the contractor was absolute and not dependent upon any question of negligence, and that the neglect of the engineer of the city of New York to direct the contractor to take any particular precautions or to refrain from doing any particular thing should not excuse the contractor in case of damage. It was to indemnify the city of New York...

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  • State Highway Dep't v. Macdougald Const. Co
    • United States
    • Supreme Court of Georgia
    • October 12, 1939
    ...C. C, 43 F. 768, 10 L.R.A. 826; Lewis v. Chicago, S. F. & C. R. Co., C. C, 49 F. 708; Dock Contractor Co. v. City of New York, 2 Cir., 296 F. 377; McGillivray Construction Co. v. Hoskins, 54 Cal.App. 636, 202 P. 677; Uvalde Contracting Co. v. City of New York, 160 App.Div. 284, 145 N.Y.S. 6......
  • State Highway Dept. v. MacDougald Const. Co.
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    ...... . .          2. Where, in a contract between a contractor and the State. Highway Department for surface treatment of a road, it is. ... acceptation. See, also, City of Wauwatosa v. Jacobus & Winding Construction Co., 223 Wis. 401, 271 N.W. ...826; Lewis v. Chicago, S. F. & C. R. Co., C. C., 49 F. 708; Dock Contractor Co. v. City of New. York, 2 Cir., 296 F. 377; McGillivray ......
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    • February 10, 1930
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  • Todd Dry Dock Eng. & Repair Corp. v. City of New York
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