Press Publishing Co. v. Holahan

The plaintiff, a domestic corporation, having its principal office for the transaction of its business in the city of New York, brings this action as a taxpayer, and calls for the interposition of a court of equity to prevent the board of public improvements of said city from approving, or voting to authorize or approve, of the execution of any contract with the defendant the Bamapo Water Company, also a domestic corporation, which would give, or purport to give, the right to the Bamapo Water 'Company to supply water to the city of New York. This motion is to continue pendente lite a preliminary injunction restraining the defendants, individually or as members of the board of public improvements of the city of New York, from voting to pass any resolutions authorizing or granting to the said defendant the Bamapo Water

The allegation, upon information and belief, that the proposed contract “is the result of a fraudulent political combination,” is unsupported by any averment of the source of the information or the grounds of the belief. Such a form of allegation is entirely insufficient, and serves no effective purpose in a pleading. None of the affidavits before me contain any evidence tending to establish the truth of this allegation, and it may therefore be dismissed without further comment.

The plaintiff herein bases its right to an injunction upon an alleged legal fraud, attempted to be committed by" William Dalton, commissioner of water supply, and certain members of the board of public improvements, who, it is claimed, have arrogated to themselves to bind the city of New York by authorizing William Dalton, commissioner of water supply, to execute the proposed contract. Otherwise stated, it is the contention of the plaintiff that it is an illegal act for the board of public improvement to authorize William Dalton, commissioner of water supply, to execute the proposed contract before it has been approved by the municipal assembly, and that it is illegal for the said Dalton to execute the said contract without the approval of the municipal assembly. The plaintiff urges that, in a matter such as the proposed contract is intended to encompass, the provisions of the Greater New York charter require that a certain order of procedure should be observed. In this in

It is further claimed that the mayor has a veto power, and that when all these steps have been taken, if favorable to the proposed contract, it becomes the duty of the commissioner of water supply to execute the contract. I think that this is substantially the correct view. It is the contention of the defendant the Ramapo Water Company that the charter confers upon the commissioner of water supply, with the approval of the board of public improvements, the power to make and sign the contract in question, without any action on the part of the municipal assembly. In support of this contention, the defendant asserts that the case of Gleason v. Dalton, 28 App. Div. 555 , 51 N. Y. Supp. 337 , is authority for this construction of the statute, and that the appellate court there fully considered the sections of the charter bearing upon this question, and that it is no longer open to discussion. The power of the municipal assembly in respect to contracts for water supply was not raised by the pleadings in the Gleason Case, nor was it adjudged. The court say (page 557, 28 App. Div., and page 338, 51 N. Y. Supp.):

“The theory of the complaint is that the proposed contract is unauthorized, by reason of the failure to advertise for bids containing proposals to furnish this water supply.”

No other breach of duty is specified in the complaint. It therefore becomes important to carefully examine the charter, and determine where the power under consideration lies. Section 471 of the charter provides as follows, viz.:

“It shall not be lawful for the commissioner of water supply to enter intoany contract whatever with any person or corporation engaged in the business of supplying or selling water for private or public use and consumption, unless, preliminary to the execution of the contract, the assent of the board of public improvements, after submission to it of the proposed contract in all its details, shall be given by resolution to the execution of such contract as submitted, and it shall not be lawful for the said city of New York or for any department thereof, to make any contract touching or concerning the public water supply, and especially the increase thereof, with any person or corporation whatsoever, save in accordance with the provisions and requirements of this act, which said provisions and requirements are hereby declared to establish the exclusive rule for the making of such contracts.”

It will be seen, from the language of this section, that while the commissioner of water supply may, with the approval of the board of public improvements, make and sign a contract of the character in question, he can only do so “in accordance with the provisions and requirements of this act, which said provisions and requirements are declared to establish the exclusive rule for the making of such contracts.” Such an act by the commissioner of water supply is a step in the fulfillment of a function of the municipal government

“The commissioner at the head of each of said departments shall prepare and execute all contracts authorized by the board of public improvements, or by said board and the municipal assembly for his department.”

What are the provisions and requirements of that act (Laws 1897, c. 378) that must be observed by the commissioner of water supply, even when his act has the approval of the board of public improvements, before the contract for a water supply can be lawfully made? They are found in section 42 of the charter, which provides as follows, viz.:

“The municipal assembly is' authorized, in accordance with the provisions of this act, to construct, establish and maintain, or to acquire by purchase, or condemnation and maintain in all parts of the city, additional water works to supply the city, or any part thereof and its inhabitants with water, and to provide for the distribution and sale to the inhabitants of the city of such water, and fix the terms thereof, and acquire and hold property, real and personal, within and beyond the limits of the city for said purposes. The municipal assembly may pass appropriate ordinances, not inconsistent with law, with this act or with any vested rights of existing companies or corporations, to enforce the provisions of this section, and to carry out its purposes.”

Again, section 413 of the charter, headed, “Authorizing Public Improvements,” reads as follows, viz.:

“Except as herein otherwise provided, any public work or improvement within the cognizance and control of any one or more of the departments of the commissioners who constitute the board of public improvements, that may be the subject of a contract, must first be duly authorized and approved by a resolution of the board of public improvements and an ordinance or resolution of the municipal assembly. * •- * When a public work or improvement shall have been duly authorized, as aforesaid, then, but not until then, it shall be lawful for the proper department to proceed in the execution thereof, in accordance with the provisions and subject to the limitations of this act.”

The providing of an additional water supply must be said to be comprehended in the phrase “any public work or improvement.” Blank v. Kearney, 28 Misc. Rep. 383 , 59 N. Y. Supp. 645 ; Ghee v. Gas. Co., 158 N. Y. 510 , 53 N. E. 692 .

My understanding of the foregoing provisions leads me to conclude that the adihinistrative officers and administrative departments of the municipality of the city of New York have not the power to acquire a supply of water, and furnish it to the inhabitants, without authority, conferred by previous legislative enactment for that purpose, by the municipal assembly. This power is vested in the municipal assembly by direct grant from the legislature of this state. Chapter 378, Laws 1897 (Greater New York Charter). The power conferred upon the commissioner of water supply is bestowed in direct subordination to the higher power vested in the municipal assembly. Moreover, the acquisition of an .additional water supply calls for the expenditure of money, which cannot lawfully be done without previous permissive legislative action on that subject by the municipal assembly. It must be said that the municipal assembly has, by the express terms of the charter, exclusive jurisdiction over both of these subjects, which can only be exercised as directed by the grant. Sections 1, 42, 169, 176, 178, 181, 187, 226, 479 et seq. of the Greater New York

Let us now inquire what has transpired to arouse the apprehensions of the plaintiff, and induce its officers to believe that there is imminent danger of its sustaining grievous and irreparable injury, and that it needs the protection of a court of equity. The principal grievance urged here is the alleged presumption of the board of public improvements to authorize the commissioner of water supply to execute the contract, and the declared or apparent intention of Commissioner Dalton to execute the same. It appears that, pursuant to the provisions of sections 469 and 472 of the charter, the commissioner of water supply undertook to determine the sources of water supply for the city of New York; that on August 9, 1899, he gave notice to the board of public improvements that on August 16, 1899, he would bring up the question of giving assent to the making of a contract to the Eamapo Company for a supply of water, and requested a full attendance. Commissioner Dalton further testifies that the terms of the contract, as he was advised by the corporation counsel, and understood and believed, are matters to be dealt with in their details by the board of public improvements, and that on August 16, 1899, in obedience to his duties, and in good faith, he submitted the results of his investigation to the board of public improvements. The closing paragraph > of his report is as follows:

“I submit herewith, for approval by your board, a, contract with the Eamapo Water Company, on the basis of the company’s proposal, and approved as to form by the corporation counsel.”

It appears from the uncontradicted testimony that not only was no motion made in the board of public improvements on August 16, 1899, or at any other time, authorizing the commissioner of water supply to execute the contract, nor was a motion made to approve the contract. Upon the motion of President Holahan, the matter was postponed for two weeks, to afford the members of the board an opportunity to make such an investigation as they desired. On August 3-0, 1899, the board of public improvements adopted the following resolutions, viz.:

“Whereas, section 472 of the Greater New York charter confers authority upon the commissioner of water supply, with the approval of the board of public improvements, to select and to determine all sources of water supply throughout the state that may be needed for the supply and distribution of water in the city of New York; and whereas, said section further provides for the acquisition by condemnation of any real estate or interest therein that may be necessary in order to acquire the sole and exclusive property in such source or sources of water supply, and to extinguish the water rights of any person or corporation therein; and whereas, the expressed principles of the present administration, when seeking the suffrage of the people of this 'city, 'was that the municipality should own and control all public utilities therein: Besolved, that it is not in the public interest, nor for the public weal, neither is it necessary, that the city should contract with a private corporation for its supply of water; that upon the expiration of the term of the

existing contracts for such purpose, proceedings should be taken to acquire the rights of the persons or corporations holding or owning such rights, to the end that the municipality shall own its water system exclusively.”

President Holahan and .Commissioner Dalton both testify that the matter of the proposed-contract was never before the board in other than a preliminary shape, for such action in the premises as the good judgment of the members of the board should dictate. I am unable to see in this state of facts any sufficient ground to apprehend an injury to the estate of the city of New York by reason of the execution of an alleged illegal and improvident contract. The responsibility of watching the water supply and making provision for the present needs, and also “ample reserve for contingencies and future demands,” rests upon the commissioner of water supply. When, in his judgment, an increase of water supply seems to be demanded, it is his duty to start investigations, and ascertain the sources from which additional water can be obtained. It is not expected that some individual or 'committee of the municipal assembly will discover the necessity for an additional water supply, and initiate and first bring to the attention of that body a plan for procuring the same. The charter imposes this duty, as I have said, upon the commissioner of water supply. Section 472 of the charter provides that “the commissioners of water supply, with the approval of the board of public improvements, shall have power, throughout the state of New York, to select and to determine all sources of water supply that may be needed for the supply of the public water works of said city; and for the supply and distribution of water in said city.”

Following the foregoing construction of the charter, and assuming that the order of procedure in obtaining an additional supply of water for the city of New York is as plaintiff claims, and that no binding contract can be entered into without the authority of the legislative department of the city government, to wit, the municipal assembly, no good ground for the injunction is here made out. So far as appears from the contents of the papers before me, the board of public improvements and Commissioner Dalton were lawfully proceeding in the matter of obtaining additional water supply, in accordance with the provisions of the Greater New York charter. It cannot be said that the execution of the contract was at any time imminent. Certainly there is no proof to support the claim that an execution of the contract is being undertaken by the .defendants without due regard to the provisions of the charter, and in violation of law. It cannot, therefore, be held that a legal fraud is attempted. For the reasons above stated, and since it does not appear that there is imminent danger of plaintiff’s rights being violated, the motion to continue the injunction should be denied, and the preliminary injunction dissolved, with costs. Settle order on notice. See, also, opinion in Keator v. Dalton (handed down this day) 62 N. Y. Supp. 878 .

Motion denied, and preliminary injunction dissolved, with costs.