People v. O'Brien

[1] Defendants made application pursuant to section 547 of the Code of Civil Procedure for judgment upon the pleadings. While an answer has been served, its allegations cannot be considered in determining the question at issue. The order for judgment has been made upon the ground that the complaint fails to state facts sufficient to constitute a cause of action, and that ground presents the ■only question here for consideration.

[2] The complaint assumes to assert three causes of action. The defendants were furnishing coal to the Clinton state prison at Danne:more, Clinton county. From October, 1903, until May, -1910, they furnished 32,943 tons of coal. This coal they fraudulently represented to the warden of the state prison as pea coal, knowing that of the amount 16,133 tons were not pea coal but were of an inferior •quality, and worth $1 a ton less than pea coal. The said agents relying upon said false representations made payments of said claims as and for pea coal. These are the facts which the plaintiff alleges as constituting its first cause of action. Upon proof of these facts standing alone the plaintiff would.be entitled to the judgment of the court for the damages sustained. The money was procured by the fraudulent representations of the defendants, relied upon by the agent of the ■state who had authority to act. All the elements of fraud are therefore included in the statement of this cause of action.

[3] In the” second cause of action it appears that the defendants were furnishing coal to the Sing Sing prison in the state of New York; that between April, 1907, and June, 1908, proposals were advertised for by the Department of Prisons for the furnishing of egg anthracite • coal for use at said prison; that pursuant to said advertisements the defendant bid $4.75 per gross ton, and said bid was accepted by the Prison Department as being the lowest bid. It is further alleged that with intent to defraud the people of the state the defendants wrongfully induced the agents and wardens of said Sing Sing prison to enter into written contracts with the defendants for the delivery of grate ■coal, which was a coal of inferior and cheaper grade, and of a value of 35 cents per ton less than egg coal, and that pursuant to said contract the defendants did deliver to the said Sing Sing prison grate coal to the amount of 11,085 tons. It is further alleged that the defendants from time to time wrongfully and unlawfully presented claims,to the .agents of said prison for coal so furnished, and wrongfully and unlawfully received pay therefor at the rate of $4.75 per ton, which was

[4] The questions arising as to the third cause of action present more difficulty. That is a cause of action to recover an overpayment for coal furnished at the Sing Sing prison under a contract to deliver 5,000 tons of egg anthracite coal at $4.95 per gross ton. It is alleged that between the 1st day of May, 1909, and the 1st day of May, 1910, the defendants delivered to said Sing Sing prison 6,050 tons of grate coal, the same being a coal of an inferior quality and of a value at that time of 55 cents less per ton than egg coal, and from time to time during said period presented to said agent and warden claims for egg coal. It is further alleged that the claims so presented were knowingly false,fraudulent, and unlawful, in that the coal furnished was ffiot egg coal, but was grate coal and of an inferior quality and of a value at that time of 55 cents per ton less than egg coal. Further, that said defendants well knew that said claims were false, fraudulent, and unlawful, and said defendants wrongfully caused and induced said agents and wardens to pay false and fraudulent claims,-and thereby obtained and received, and have ever since kept and retained without authority, money belonging to the state to the amount of $3,327.50. In this cause of action, as in the second cause of action, there is no allegation that the grate coal was delivered in substitution for the egg anthracite, for which the contract was made; but, as in the second cause of action, it has been assumed by the court and by counsel that such was the fact, and so it will be here assumed. It is not specifically alleged in this cause of action that the agent of the state relied upon the fraudulent claims of the defendants in making these payments. It is alleged, however; that they falsely and fraudulently represented that the coal was egg coal, while in fact it was not egg coal, but was of an inferior quality, and that they wrongfully and fraudulently induced the wardens to pay such false and fraudulent claims. The court should give the pleading a fair interpretation, and the complaint should probably be deemed fairly to allege that the agents and wardens of prisons were induced to make payment of said claims by the fraudulent representation of the defendants that the coal delivered was egg coal, as

I recommend, therefore, that the order and judgment be reversed, with costs, and that the motion for judgment be denied, with $10 costs.

Order and judgment reversed, and motion for judgment denied, with $10 costs and disbursements. All concur, except KELLOGG, J., dissenting in memorandum in which WOODWARD, J., concurs.

(dissenting). Every public official is presumed to have acted lawfully and to have performed his duties in good faith. The complaint must be read in connection with this presumption. It'contains no allegation of bad faith or fraud on the part of the agent and warden or clerk, and does not allege that they relied upon or were deceived by any statement or representation of the defendants. It was prepared by skilled lawyers, who evidently stated the facts in the most favorable manner. The fact that the appellant has appealed from the order, instead of amending the complaint, indicates that the facts do not permit an amendment or that it is deemed more important to settle a question of practice than to try the case on its merits.

Under section 132 of the Prison Law (Consol. Laws, 1909, c. 43), the agent and warden may supply the prisons with necessary articles for maintenance “either by contract or by purchase” as shall be directed by the Superintendent of State Prisons. Under the first alleged cause of action there evidently was no contract for the furnishing of coal from time to time,, but the transactions were “by purchase.”

It is thus apparent that all articles purchased must be examined by the agent and warden and the clerk, and each is required to see that there is no discrepancy in the quality or quantity and that -they comply with the bill accompanying the delivery. Evidently the kind of coal and the price were agreed upon. The officers were derelict in their duty if they left to a vendor to determine what quality of .goods he should deliver and what price he should charge therefor. It is not alleged that the state did not get the kind of coal it purchased, or that it paid more for the coal than it was actually worth, •or more than the agreed price. It is simply alleged that the coal delivered was “of an inferior quality and grade, and of a value of one dollar per ton less than pea coal.” That is the only allegation as to the kind of coal or the value of any kind of coal. The only other fact alleged is that the defendants presented verified claims for the coal describing it as pea coal, and that said claims in that respect were knowingly false and fraudulent and that they received pay on ■said claims.

It was the duty of the agent and warden to inspect the coal when ■delivered and to ascertain that it was the kind bought. We must .assume that duty was performed. If upon examination the coal delivered was found to be the coal purchased, it is quite immaterial, so far as the plaintiff’s claim for damages is concerned, how the coal ■was described in the claims presented. The actual purchase, delivery, and acceptance of the coal are what fixed the rights of the state.

For its second cause of action it is alleged that pursuant to advertisements for furnishing egg anthracite coal the defendants’ bid of $4.75 per gross ton was accepted by the prison department as the -"lowest bid; that a contract was actually made between the agent and warden and the defendants for the furnishing of grate coal at that price, grate coal being worth 35 cents per ton less than egg coal; -and that the coal was delivered and paid for pursuant to the contract. It alleges that the defendants wrongfully, fraudulently, and unlawfully, and contrary to the terms of the bid, caused and induced ■the agent and warden to enter into the above contract.

Under section 132 of the Prison Law, after a bid is accepted, a contract is to be made, if the bidder gives satisfactory security, un.less the superintendent shall deem it best to decline all proposals and

The third alleged cause of action proceeds upon the theory that the defendants by contract were to furnish 5,000 tons of egg anthracite coal at $4.95 per ton, but that they delivered 6,050 tons of grate coal, which was in fact worth 55 cents per ton less than egg coal, and presented a bill for egg coal; that the claim so presented was knowingly false, fraudulent, and unlawful; and that the defendants unlawfully caused and induced the agent and warden to pay the false and fraudulent claim.

This was evidently an executory contract to deliver coal in the future. We may fairly assume that the difference between grate coal and egg coal is apparent on inspection. The deliveries were made prior to May in 1910; the action was brought in January, 1912. It does not appear that any previous complaint had been made about the coal. It was accepted and used as complying with the terms of the contract. The description of the coal in the contract as grate coal is not a warranty which can be relied upon after the coal is accepted, but it is a description of the property, and, if not complied with, the purchaser is not required to accept, but if the property offered is accepted as a compliance with the contract, such acceptance irrevocably establishes that the contract has been fulfilled by the vendor. Coplay Iron Co. v. Pope et al., 108 N. Y. 232 , 15 N. E. 335 ; Carleton v. Lombard, Ayres & Co., 149 N. Y. 137 , 43 N.

The state as a contractor, or suitor with reference to its contract, is bound by the same rules of law as apply to private corporations and persons. If its officers, charged with the duty of purchasing and accepting goods for use, act in good faith and give the state the benefit of their best judgment in determining whether the goods furnished under an executory contract are a compliance with its terms, their determination is binding upon the state and it has no further remedy upon the contract. In order to obtain relief where property has been accepted under an executory contract without warranty, it must show not only the wrongful act of the contractor but of its officials or servants who accepted the property, thereby vitiating the effect of the acceptance. A mere allegation that a party wrongfully or fraudulently committed an act is not a sufficient allegation of fraud, but is a conclusion; and, no fact being stated from which the conclusion follows, it is without effect. The only act alleged against the defendants tending to show that they acted fraudulently, wrongfully, or unlawfully is that they billed the coal as egg coal. There is an entire absence of facts tending to show that they corrupted or improperly influenced the prison officials or by positive fraud overreached their minds. It cannot be, when a party to an executory contract tenders an improper article under the contract as a compliance with its terms, that that alone constitutes fraud which vitiates the acceptance and makes the vendor liable for damages. Some fraudulent act which prevented a proper inspection, or which overreached or corrupted the minds of the official, must he-shown. The allegation that the state officials were fraudulently procured to do certain acts is a mere conclusion; no facts being stated upon which such conclusion is based.

I favor an affirmance, with leave to amend so that the plaintiff, if it has a cause of action, may allege it, and that the trial may proceed upon a proper complaint.