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Meyers v. Pennsylvania Steel Co.

77 A.D. 307 Court N.Y. App. Div. English

Delivered by Laughlin, J.:

Contents

Majority

p. 307
Julius Meyers, Respondent, v. Pennsylvania Steel Company, Appellant, Impleaded with The City of New York and Others.

Headnote

Incorporation in a public contract of unconstitutional provisions of the Labor Law — its execution not enjoined at the suit of a taxpayer—general allegations of fraud not admitted by a demurrer—provision requiring material of a particular kind and that the contractor shall have had a plant in operation for a year.
The fact that provisions of the Labor Law (Laws of 1897, chap. 415, as amd.)„ inserted pursuant to a mandate of the Legislature in a contract made between the commissioners of the New East River Bridge and a steel company for tlieconstruction of the approaches to such bridge, have, since the execution of the contract, been declared unconstitutional by the Court of Appeals, does not entitle a taxpayer of the city of New York to an injunction restraining the execution of such contract, especially when it appears that, at the time such contract was made, the Appellate Division had decided that the provisions in question were properly inserted therein, and when it also appears that there is no allegation in the complaint that the contractor has refused to comply with any of the conditions of the contract on the ground of their unconstitutionality. General allegations of fraud contained in the complaint in the taxpayer’s action,, not accompanied by allegations of the facts constituting the alleged fraud, are-not admitted by a demurrer to such complaint.
The commissioners of the New East River Bridge had power to insert in the-specifications for the bridge provisions prescribing the character of the steel-desired and requiring that the bidder should have had a plant in operation for' a year.
Appeal by the defendant, the Pennsylvania Steel Company, from an, interlocutory 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 1st day of April, 1902, upon the decision of the court, rendered after a trial at the New York Special Term, overruling said defendant’s demurrer to the plaintiff’s amended complaint.
William O. Trull, for the appellant.
L. Lajlin Kellogg, for the respondent.

This is an action by a taxpayer to restrain the further execution of a contract in writing, made prior to the commencement of this action between the commissioners of the New East River Bridge and the appellant, for the steel and masonry approaches on the Manhattan and Brooklyn sides of the New East River Bridge.

p. 308
One of the grounds of the demurrer is that the complaint does not state facts sufficient to constitute a cause of action. This court recently affirmed without opinion a decision of the Special Term sustaining a demurrer to a similar complaint in a similar action upon the same ground. (Knowles v. City of New York, 37 Misc. Rep. 195 ; affd., 74 App. Div. 623 .) The learned trial justice followed our decision in Meyers v. City of New York ( 58 App. Div. 539 ), which he deemed controlling. That action was brought before the work was let to en join the making of the contract. It having been alleged that the contract price of the work would be materially increased in consequence of provisions inserted in the specifications requiring the contractor to comply with the provisions of the Labor Law (Laws of 1897, chap. 415, as amd.), which the Court of Appeals had previously declared to be unconstitutional and void (People ex rel. Rodgers v. Coler, 166 N. Y. 1 ), this court held that a cause of action was stated. It now appears that the contract embodying this provision of the Labor Law was made on the 7tli day of November, 1900, prior to the decision of the Court of Appeals in the case of People ex rel. Rodgers v. Coler (supra). It thus appears that, at the time the commissioners prepared their specifications and invited proposals for the work, in inserting the provisions, which it is now claimed render the entire contract void, they merely followed the mandate of the Legislature. Moreover, it appears to have been decided by the court prior to that time in an action to enjoin the award of the contract that these provisions were properly inserted. (Meyers v. City of New York, 32 Misc. Rep. 522 ; affd., 54 App. Div. 631 .) Surely the commissioners are not chargeable with bad faith in complying with the statutory law of the State and in not presuming to decide that these provisions of the statute were void especially in view of the decisions of the courts previously made sustaining their constitutionality.

In any event the appellant is an innocent party and it cannot be deprived of its contract rights acquired in good faith merely because some of the conditions imposed have subsequently been declared illegal. Their illegality does not render the contract void, nor does it for this reason become an illegal contract, the execution of which may be enjoined by a taxpayer.

The general allegations of fraud were disposed of favorably to

p. 309
this appellant’s contention in the Meyers case. It was there held that there being no allegations of the facts constituting the fraud, fraud was not admitted by the demurrer. It was there also held that the commissioners were not required to advertise for bids or to let the contract to the lowest bidder, and that, therefore, they were at liberty to require in their specifications a particular kind of steel. In the construction of work of this nature and magnitude, upon the security and safety of which will depend the lives and property of thousands of people, it was but the part of wisdom to require the very best kind and quality of material and to insure the most skillful and scientific workmanship. The provisions in the specifications prescribing the character of steel and requiring that the bidder should have had a plant in operation for a year were designed to accomplish this purpose, and the action of the commissioners in inserting them is to be commended rather than criticised.

Although the Court of Appeals has held that these invalid provisions of the Labor Law are not binding upon a contractor, there is no allegation in the complaint that the appellant has not fully complied therewith or that it has refused to perform any of the conditions of the contract on the ground of their invalidity. The contract remains in full force, and the appellant is proceeding in good faith with the performance of this work thereunder, and is entitled to receive the compensation therein agreed to be paid in accordance with its terms, even though the provisions of the Labor Law are void and might have been omitted. (People ex rel. Rodgers v. Coler, 56 App. Div. 98 ; 166 N. Y. 1 ; People ex rel. Treat v. Coler, 166 id. 144 ; Calhoun v. Millard, 121 id. 69 .)

It follows that the interlocutory judgment should be reversed, with costs, and the demurrer sustained, with costs, and final judgment should be directed dismissing the complaint, with costs.

Van Brunt, P. J., Patterson, Ingraham and Hatch, JJ., concurred.

Judgment reversed, with costs, and demurrer sustained, with costs, and final judgment directed dismissing complaint, with costs.

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