Randolph McNutt Co. v. Eckert

• Decision Date: 15 July 1931
• Citation: 257 N.Y. 100,177 N.E. 386
• Parties: RANDOLPH McNUTT CO. v. ECKERT, City Comptroller.
• Court: New York Court of Appeals Court of Appeals

257 N.Y. 100

177 N.E. 386

RANDOLPH McNUTT CO.

v.ECKERT, City Comptroller.

Court of Appeals of New York.

July 15, 1931.

Proceedings by the Randolph McNutt Company for peremptory mandamus order directed to William A. Eckert, as Comptroller of the City of Buffalo, to compel him to issue warrant for payment of moneys due petitioner for goods furnished the Board of Education of the City of Buffalo under contract. From an order of the Appellate Division (232 App. Div. 721, 247 N. Y. S. 539), affirming an order of the Special Term which granted the peremptory mandamus order, defendant appeals.

Affirmed.

O'BRIEN, J., dissenting.

Appeal from Supreme Court, Appellate Division, Fourth department.

Charles L. Feldman, Corporation Counsel, of Buffalo (Andrew P. Ronan, of Buffalo, of counsel), for appellant.

Daniel J. Kenefick and Theodore G. Kenefick, both of Buffalo, for respondent.

Arthur J. W. Hilly, Corporation Counsel, of New York City (William E. C. Mayer and J. Joseph Lilly, both of New York City, of counsel), for City of New York, amicus curiae.

CRANE, J.

The Randolph McNutt Company furnished thirty-three teachers' desks to the board of education of the city of Buffalo, under contract awarded to it for various items of public school furnishings. The thirty-three desks, according to the contract price, amounted to $759, for which the warrant of the board was drawn, payable to the Randolph McNutt Company and sent to the comptroller for his counter signature. The comptroller has refused to sign, and the peremptory order of mandamusappealed from compels him to do so. The action of the comptroller is due to the form of the specifications prepared by the board of education calling for bids. Although we cannot follow the comptroller and his adviser, the corporation counsel, to their conclusion that the contract for school furnishings given to the Randolph McNutt Company is illegal, we appreciate their hesitancy in recognizing as legal the methods adopted by the board of education.

Subdivision 8 of section 875 of the Education Law (Consol. Laws, c. 16) reads as follows: ‘8. No contract for the purchase of supplies, furniture, equipment, or for the construction or the alteration or remodelling of any building shall be entered into by a board of education involving an expenditure or liability of more than one thousand dollars unless said board shall have duly advertised for estimates for the same and the contract in each case shall be awarded to the lowest responsible bidder furnishing the security as required by such board.’

Section 880 of the same law (subdivisions 2 and 3) reads:

‘2. Such funds shall be disbursed only by authority of the board of education and upon written orders drawn on the city treasurer or other fiscal officer of the city. Such orders shall be signed by the superintendent of schools and the secretary of the board of education or such other officers as the board may authorize. Such orders shall be numbered consecutively and shall specify the purpose for which they are drawn and the person or corporation to whom they are payable.

‘3. It shall be unlawful for a city treasurer or other officer having the custody of city funds to permit the use of such funds for any purpose other than that for which they are lawfully authorized and such funds shall not be paid out except on audit of the board of education and the countersignature of the comptroller. * * * ’

Within the limitations of its appropriation (section 877, subd. 10) the expenditures of school moneys for educational purposes is given to the board of education with very limited control by the city authorities. The board having audited a charge and issued its warrant, the only limitation upon its power is the duty of the comptroller to see that the funds are used for a lawful purpose. He cannot countersign for an illegal charge or claim. Matter or Fleischmann v. Graves, 235 N. Y. 84, 138 N. E. 745;Matter of Poucher v. Berry, 249 N. Y. 16, 162 N. E. 570.

If the board of education had violated subdivision 8 of section 875, as above quoted, by awarding a contract for school furniture in excess of $1,000 without advertising for estimates, the contract would be illegal. If it had accomplished the same result by indirection, that is, had so fixed or manipulated the specifications as to shut out competitive bidding or permit unfair advantage or favoritism, the contract likewise would be illegal. Brady v. Mayor, etc., of City of New York, 20 N. Y. 312;Bigler v. Mayor of New York, 5 Abb. N. C. 51. The principle underlying the law relating to the public letting of contracts through advertisement is stated by Dillon in his work on Municipal Corporations (5th Ed.) § 807, as follows: ‘When by charter or statute a municipality can only let its contracts to the lowest bidder after advertisement, an implied condition and restriction is placed upon the proceedings of the municipality that the various steps adopted by it to let a contract shall be of such a nature and taken in such form as in good faith to invite competition. * * * The plan and specification are essential to competitive bidding because it is only through their agency that there is a reasonable assurance that all bidders are competing upon the same basis and without favoritism and that no fraud enters into the award.’

Examining the specifications we see that they call for school chairs and desks of various descriptions without specifying the quantity desired. For instance, ‘Bentwood chairs' of certain wood and finish are mentioned; likewise, kindergarten chairs made of birch with saddle-shaped seats, steel kindergarten chairs with all joints electrically welded, making the whole frame a solid unit; office arm chairs are to be constructed of select quartered white oak, and teachers' chairs are to be made of select quartered white oak, with saddle-shaped seat, full framed in box, tapered legs, and slat back. The adjustable steel desks and chairs, also the flat-top desks, cafeteria and library tables are described in detail as to material, shape, and style. These various items are numbered consecutively from 3600 to 3654, ending with the item calling for blackboards. The instruction to bidders states: ‘Each proposal must state a certain sum for each item.’ Under the heading ‘General Specifications' we find the following:

‘5. In the column headed ‘Quantity Wanted’ is set out an estimate of the quantity which the Board of Education expects to purchase during the year specified; where the space is left blank, it means that the Board is unable to anticipate the quantity of...