John A. Roebling's Sons Co. v. City of New York

Majority

p. 366

John A. Roebling’s Sons Company of New York, Respondent, v. The City of New York, Appellant.

■ First Department,

December 30, 1905.

Headnote

Municipal contracts — city of Hew York — when contractor entitled, to interest on payments wrongfully withheld..

When a municipal- contract for the building of a bridge provides that on the expiration of thirty days after the acceptance, of -the work by the commissioners, the commissioners will direct to he paid to the contractor the amount . remaining due, and such contractor in an action has established its right to

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payment, interest on the amount due from thirty days after such acceptance is recoverable, even though notice of the claim was not filed or action brought until some time after the acceptance of the work.

This is so, although section 261 of the charter of the greater city of New York provides that no action shall be brought against the city until thirty days has elapsed since the claim was presented to the comptroller. The interest runs from the time payment was due, not from the time of action to recover such, payment.

The fact that the engineer refused a certificate that the work was completed on time until nearly a year after the completion of the work cannot have the effect of .depriving the contractor of interest to which he was otherwise entitled.

Appeal by the defendant, The City of New York, from so much of a judgment of the Supreme* Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 3d day of October, 1905, upon the report of a referee, as awards interest to the plaintiff on the sum recovered.

Theodore Connoly, for the appellant.

Herbert Noble, for the respondent.

This action was brought to recover the sum of $231,081.59, a balance alleged to be due the plaintiff under a contract for the construction of the new East. River bridge. The defendant claimed the right to deduct from.such balance the sum of $175,000 for 175 days’ alleged overtime in the completion of the work. The contract under which the work was done provided that whenever, in the opinion of the engineer-having supervision of the work for the city, the other party to the contract shall have “ completely performed,” then the .engineer should so certify in writing to the commissioners and “ on the expiration of thirty days after the acceptance by said Commissioners of the work * * the said Commissioners will direct to be paid to the said party of the second part, in cash, the amount remaining ” due. The work was completed and the bridge accepted by the city on the 15th of November, 1902, but the final certificate was not given until the 30th- of July, 1903. It was demanded, however, immediately upon completion of the work but the engineer refused to give a certificate other than one which would show that the contractor had not performed the work on time; in

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other words, that it had taken 175 days more than called for by the contract and for. which, according to its terms, it was to be penal* ized in the sum of $1,000 a day, or $175,000 in all. The plaintiff did not ascertain this fact until a few days after November fifteenth, -when its manager went to the office of the comptroller of the city and there had 'tendered to him a check in full' payment of the contract price less the $175,000 which had been 'deducted. The manager refused to accept the amount tendered; and on the '23d of Jnly, 1903, it filed its claim, with the comptroller and thereafter brought this action. ‘ • '

The issued raised by the pleadings were sent to ,a referee to hear and determine, who found for the- plaintiff in the full amount claimed, together with interest thereon from December 15, 1902 — that is, thirty days after the completion and acceptance of the work. Judgment was entered upon the referee’s report and the defendant now appeals from so much thereof as allowed interest on the sum recovered froin December 15,1902—claiming that, interest could only be recovered on such sum from the 23d of August, 1903 — that is, thirty days after the claim was filed with the comptroller.

The city’s contention in this respect is . based upon the provision of section '261 of' the Greater New York charter (Laws of 1901, chap. 466), that “No action or special proceeding, for- any cause whatever, shall be prosecuted or maintained against. The Oity of New York,, unless it shall appear by and as an allegation in the complaint or -necessary moving papers, that at least thirty days have .elapsed since the demand, claim or claims upon which such action or special proceeding is founded, were presented to the comptroller of said city for adjustment and that lie has neglected or refused to make an adjustment or payment thereof for thirty days after such presentment.” I am unable to see the force of this contention'. The section of the charter quoted has no application to the question here presented. It simply requires that as a basis for the maintenance of an action or special proceeding a claim' shall be filed at least thirty days before the action is commenced or the special proceeding instituted. • It does not state in terms, nor can it be implied 'from the facts here presented; that interest cannot: be recovered on the claim made, if stieh claim be subsequently established. Here the. cause of action against the city arose out of the-

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contract which it entered into with'thé plaintiff and which fixed and controlled the time of payment. It is true that final payment under its terms was dependent upon the certificate of the engineer and until that had been issued the plaintiff was in no position to demand payment from the comptroller, who could not, in fact, have paid it until the certificate were issued or a judgment obtained.

The plaintiff was entitled to a certificate when the work was completed and the bridge accepted by the city, and by express terms the .contract provided that “on the expiration of thirty days after the acceptance by said Commissioners,’’ payment would be made. The legal obligation, therefore, rested upon the city (plaintiff having fully performed the contract and the work having been accepted) to pay the stipulated price within the stipulated time. If the contention of the city be correct, then it could, by the engineer’s withholding his final certificate, deprive the plaintiff of interest ón the amount to which it was entitled, even though the validity of its claim were conceded. The plaintiff, as already said, was entitled to the final certificate on the 15th of November, 1902, and it then demanded the same. The engineer refused to give it until the 23d of July, 1903. This was a wrongful and unlawful act upon his part. The judgment so determined and the city conceded it by not appealing. The engineer, in giving or withholding the certificate represented the city, and his act must be charged to it. The plaintiff cannot, 'by the wrongful act of the engineer, be deprived of the interest to which it would otherwise be legally entitled.

The judgment awarded interest from the 15th of December, 1902, that is, thirty days after the demand for the certificate w-as made and thirty days after it was legally entitled to receive such certificate.

I think the judgment is right and should be affirmed, with costs.

O’Brien, P. J., Patterson, Laughlin and Houghton, JJ., concurred.

Judgment affirmed, with costs.