Knowles v. City of New York

• Decision Date: 10 November 1903
• Parties: KNOWLES v. CITY OF NEW YORK et al.
• Court: New York Court of Appeals Court of Appeals

176 N.Y. 430

68 N.E. 860

KNOWLES

v.CITY OF NEW YORK et al.

Court of Appeals of New York.

Nov. 10, 1903.

Appeal from Supreme Court, Appellate Division, First Department.

Action by William P. Knowles against the city of New York and others. From a judgment of the Appellate Division (77 N. Y. Supp. 1130) affirming an interlocutory judgment of the Special Term overruling a demurrer to the answer of defendants, and reversing an interlocutory judgment of the Special Term overruling a demurrer to the complaint, and directing that it be dismissed, plaintiff appeals. Affirmed.

L. Laflin Kellogg and Alfred C. Petté, for appellant.

William C. Trull and Delos McCurdy, for respondent Pennsylvania Steel Co.

George L. Rives, Corp. Counsel (James McKeen, of counsel), for respondents city of New York et al.

CULLEN, J.

As to the practice in this case, it is sufficient to say that the judgment under review proceeded on the ground that the complaint did not state a good cause of action, and the only question presented to us is the sufficiency of that complaint. The action is brought by a taxpayer of the city of New York against the city, the commissioners of the East River Bridge, and the Pennsylvania Steel Company, to declare void a contract entered into between the said commissioners and the company for the construction of the approaches to the bridge; to enjoin the continued performance of said contract, and the further payment of any moneys on account thereof; and to recover the moneys thitherto paid thereon. The complaint sets forth the act of the Legislature authorizing the construction of the bridge (chapter 789, p. 1687, Laws 1895); the appointment of certain of the defendants as commissioners under the provisions of the act; the advertisement by said commissioners for sealed proposals or bids for the construction of the steel and masonry approaches to the suspended structure of the bridge; the specifications of the work to be done and the material to be furnished; the terms and conditions of the contract into which the successful bidder would be required to enter; the receipt of several proposals from various bidders, and the amounts of their respective bids; the award of the contract to the defendant the Pennsylvania Steel Company, and the execution of the contract in pursuance of such award; and the entry of such company upon the performance of said contract. The legality of the contract is assailed on several grounds stated in the complaint. First, it is alleged there were discrepancies in the notices furnished to the contractors. In some of the notices it was stated that a certified check for $6,000 must accompany the proposals, and that the successful bidder would be required to execute a bond in the penalty of $200,000 for the performance of the contract. In others the amount of the certified check was given as $12,000, and that of the bond as $400,000. Second. The notice contained the following provision: ‘As by far the greater part of this work can be executed only by bridge establishments of the first class, bids will be received only from such parties as have the requisite plant and facilities which have been in successful operation on work of similar character for at least one year. The bidders must be, in the opinion of the commissioners, fully qualified, both by experience and in appliances, to execute work of this character and importance according to the highest standard of such work at the present time.’ Third. The specifications prescribed that the finished steel to be furnished under the contract should not contain to exceed .06 of 1 per cent. of phosphorus, .04 of 1 per cent. of sulphur, .80 of 1 per cent. of manganese, and .35 of 1 per cent. of silicon. Fourth. That the specifications and contract required the contractor to comply with the provisions of the labor law (chapter 415, p. 461, Laws 1897), requiring the contractor to pay the prevailing rate of wages, to employ his laborers only eight hours a day, and to use only stone cut within the state of New York. The only allegation of fraud in the complaint is the following: ‘Fourteenth. Upon information and belief, that the said contracts and specifications, and the said advertisement for bids and proposals for the doing of said work, were fraudulently prepared and issued, and the said requirements of said advertisements that bids would be received only from parties having the requisite plant and facilities, which had been in successful operation on work of similar character for at least one year, and of the specification providing that the finished steel should not contain to exceed .06 of 1 per cent. of phosphorus, .04 of 1 per cent. of sulphur, .80 of 1 per cent. of manganese, and .35 of 1 per cent. of silicon, were unreasonable and unfair, and were fraudulently prepared and issued with the purpose and intent of limiting competition and confining the same to a small class of bidders, and did limit competition and confine the same to a small class of bidders, thereby increasing the cost of the work, as, by said requirements, although competent and reliable bidders, with the requisite plant and facilities, desired to submit bids and proposals for the doing of said work, they were prevented from so doing unless their plant and facilities had been in successful operation on work of a similar character for at least one year; that the requirement in the specification as to the elements of finished steel tended to, and actually did, increase the price of the work, because it prohibited the furnishing of steel by any other company than the Carbon Steel Company, whose steel alone meets the requirements and conditions of said specifications, although steel manufactured by other companies than said Carbon Steel Company is equally good, and well adapted for the purposes of said proposed work.’ It is also charged by the complaint that the provisions concerning the labor law increased the cost of the work.

The commissioners for building the bridge did not derive their powers, duties, and authority from the charter, but from the special act of the legislature which provided for the construction of the bridge. At the time of the commencement of the work, New York and Brooklyn were separate municipalities. The Greater New York charter of 1897, which consolidated the two cities, did not in any way repeal or modify the act of 1895 directing the construction of the bridge. The prosecution of thw work still continued under the commissioners appointed for the purpose until by the revised charter of 1901 (section 595, subd. 5; Laws 1901, p. 252) the board of commissioners were abolished, and its powers and duties devolved upon the commissioner of bridges of the city of New York. It was properly held by both the courts below that the power of the commissioners in the construction of the bridge was, under the statute, plenary, and not limited or qualified by charter provisions concerning the letting of contracts. This was necessarily so, for several reasons. At the time the work was commenced, the commissioners were not agents of a single municipality, but of two cities, whose charter provisions might conflict. Even after consolidation the provisions of the New York charter relating to the letting of contracts were such as could not be made applicable without subjecting the conduct of the trustees to review and control by other city authorities, while the intent of the statute was to vest power and discretion in the construction work exclusively in the trustees. This was rendered necessary by the exceptional character of the work. Its magnitude was such as to prevent the work being let in a single contract, and the unforeseen difficulties which might be encountered would equally preclude such a course. While some parts of the work and much material might be the subject of separate contracts, still it might be necessary to do other parts by day's work. Speed in the construction of the bridge was of the greatest importance,...