Walter v. McClellan

On the 21st of June, 1905, the city of New York, acting bjr and through the aqueduct commissioners under the power vested in them by chapter 490, p. 666, of the Laws of 1883, and the amendments thereto, entered into a contract with the respondents MacArthur Bros. Company and Winston & Co., by which the latter agreed to build a reservoir and dam at Cross river, in the county of Westchester, according to certain plans and specifications annexed to and made a part of the contract, for the consideration expressed therein. Prior to the making of the contract the aqueduct commissioners duly advertised for 15 consecutive days, commencing May 10, 1905, for sealed bids for the work. The notice published, notifying bidders, was quite minute in regard to the various details connected with the proposed work, the time when the same must be commenced and finished, together with a statement based upon the estimate of the engineer of the aqueduct commissioners of the approximate quantities of work to be done and materials to be furnished, which statement was divided into 49 different items. The bidders were notified that the quantities were approximate only, being given as a basis for the uniform comparison of bids, and that the commissioners did not, expressly or by implication, agree that the actual amount of the work would correspond therewith, but reserved the right to increase or diminish the quantities of any classes or portion of the work as might be deemed necessary by the engineer. The bidders were required to satisfy themselves by personal examination of the location of the proposed work, and by such other means as they might prefer as to the accuracy of the estimates, and that they could not at any time after the submission of an estimate dispute or complain of such statement or estimate of the

He attacks the judgment principally upon the ground that the contract entered into with MacArthur Bros. Company and Winston & Co. is illegal (1) because the reservoir and dam proposed to be built would not be located in the territory over which the aqueduct commissioners had jurisdiction; (3) because the aqueduct commissioners had no power at the time the contract was made to build a reservoir and dam," inasmuch as that power was lodged in the department of water supply,.gas, and electricity; (3) because the character, location, extent, and quantity of materials and work which may be required by the contract are not specified, limited, or stated in the contract, nor is the liability of the city of New York determined by the contract, specifications," and plans; (4) because there was no such standard of comparison set forth in the notice to contractors and the advertisement

“An act to provide new reservoirs, dams and a new aqueduct with the appurtenances thereto, for the purpose of supplying the City of New York; with an increased supply of pure and wholesome water.”

Section 2 authorizes the commissioner of public works, under the direction of the aqueduct commissioners, to submit a plan or plans, together with maps, specifications, estimates, and particulars relating thereto, for the construction of a new aqueduct or conduit for water from some point on the Croton river or Croton Lake to some point in the city of New York, and for the construction of one ur more dams and reservoirs to retain such water, and for the construction of such sluices, culverts, canals, pumping works, bridges, tunnels, etc., as may be necessary to the proper construction, maintenance, and operation of the aqueduct, dams, and reservoirs. The aqueduct commissioners, by this section, are authorized to adopt, modify, or reject any such plan or plans, and in their discretion to cause surveys to be made, etc. Throughout the act the words are continually used viz., “aqueduct,” “dams,” “reservoirs,” etc. There is nothing in the act nor any of the amendments to indicate that the Legislature intended to limit the location of the dams and reservoirs to the Croton river. The only limitation is that the aqueduct which is to carry the water collected in the reservoirs shall begin at some point on the Croton river or Lake, and end at some point in the city of New York. Section 36, p. 678, of the act, as amended by chapter 196, p. 229, of the Laws of 1887, clearly indicates a legislative intent not to limit the location of dams and reservoirs to the Croton river, because authority is there given to the city to construct highways and bridges as may be made necessary “by the construction of any reservoir in the county of Westchester or county of Putnam under this act.” The dam proposed to be built is in the county of Westchester, on a tributary of the Croton river, and where the aqueduct commissioners have the power to build a dam.

It is also urged that the aqueduct commissioners had no authority to project or undertake new work, but only to complete work which had been commenced prior to January 1, 1901. The argument in this respect is based upon certain sections of the Greater New York Charter. Section 518, c. 378, p. 182, Laws 1897; chapter 313, p. 691, Laws 1899; section 518, c. 466, p. 231, Laws 1901. Section 518 of chapter 378, p. 182, of the Laws of 1897, provided that the aqueduct commissioners should not begin any new work and that the term of .office of the commissioners then in office should terminate and cease on January 1, 1901. This section, however, was amended by chapter 313, p. 691, of the Laws of 1899, so as to provide that the term of office of the commissioners should cease and determine on completion

“Nothing In this act contained ■ shall be deemed or construed to repeal or in anywise affect chapter 490 of the laws of 1883 * * * or the several acts amendatory thereof. * * * The term of office of the commissioners appointed and existing under the aforesaid Act shall cease and determine on the completion of the work and thereupon all papers * * * shall be delivered to the commissioner of water supply, gas and electricity.”

In this connection it is to be noted that section 8 of chapter 723, p. 2026, of the Laws of 1905, which provides for the establishment of a water commission and the storage of water in certain sections of the state, also provides that:

“Nothing herein contained shall in any way affect the acquiring of lands by the aqueduct commissioners of the city of New York under the provisions Of chapter 490 of the Laws of 1883, as heretofore amended.”

The act of 1905, of course, has no application to the question here presented, except in so far as it indicates that the Legislature recognized that the work of the aqueduct commissioners had not, at the time of the passage of that act, been completed.

In view of the foregoing provisions of this statute, I do not think it can be successfully contended that the construction of the proposed dam and reservoir is new work, or that the office of the aqueduct commissioners with reference to it had, at the time the contract was made, been terminated, and the power theretofore lodged in such commissioners been transferred to the commissioner of water supply, gas, and electricity. The act of 1883, as its title indicates, was to enable the city of New York to acquire, by the construction of an aqueduct extending from the city to Croton river, a supply of pure and wholesome water sufficient to meet the needs of the city, and for that purpose to construct necessary dams, and reservoirs for the retention of water. The plan contemplated has been partially completed. The aqueduct has been built as well as certain dams and reservoirs, but sufficient water has not yet been retained to exhaust the capacity of the aqueduct. The dam in question is but a part of the same plan designed for the retention of water to" be carried through the same aqueduct. It cannot, therefore, be said to be new work, but is a mere incident to the work begun under the act of 1883, and which the statute permits the aqueduct commissioners to complete.

If the foregoing conclusions be correct, then substantially the only question remaining to be considered is whether the contract asking for bids at unit prices for doing the work and furnishing the materials, and which might be increased or diminished as the work progressed, based upon an estimate of quantities, was one which the aqueduct commissioners had the power to make. There was no way, according to the uncontradicted testimony of the engineers, by which it could be accurately determined, when the contract was let, the exact amount of work or materials which would be required. The contract had to be let in one, of two ways—either for a lump sum, which would require the contractor to do all the work for a given amount, or- else for a specified price based upon estimated quantities by which the contractor agreed to do all the work for separate prices bid by him per unit of measurement,

In the O’Brien Case the contract provided for payment by items and units of measurement, and contained substantially, in those respects, the same provision, and was entered into by the aqueduct commissioners under the same statute, as the contract here under consideration. Commenting upon this feature of the contract, Judge Peckham, who delivered the opinion, said:

“A perusal of the contract itself, as shown by the analysis already herein set forth, shows that it was drawn to provide for all the work of every kind and description which should be called for in the course of the building of this aqueduct, and for all such work and for the furnishing of all the necessary materials the contract provided special prices should be paid. Extra work or work outside of the character or amount of that specified in the contract was provided for and a way pointed out which was to be followed in order to bind the defendant.”

In the contract now under consideration the obligation on the part of the city, including the method of payment to the contractor, is just as definite and fixed as it was in the contract in the O’Brien Case. There is no material difference in this respect between the two contracts. Bidders here were informed, as already indicated, that the engineer, after having examined the site of the dam by means of borings, test pits, etc., had made an estimate of the nature and extent as nearly as practicable of the work required, and that the several bids would be tested by the quantities and kinds of work mentioned in the estimate. The estimate divides the work into 49 different items, consisting of excavations of different classes, refilling, timber, cement, concrete blocks, masonry of different classes, steel and cast iron pipes, valves, culverts, and other work. Bidders were told that the quantities were approximate only, the same being given as a basis for uniform comparison of bids, and that the commissioners did not, expressly or by implication, agree that the actual amount of work to be done or materials to be furnished would correspond with the estimates, but that they reserved the right to increase or diminish the quantity of any class, if deemed necessary by the engineer in charge of the work. This was a wise provision, and would seem to be. almost necessary in order to properly protect the.interest of the city. This reservation did not mean that the commissioners could arbitrarily increase or diminish the quantities without regard to the actual amount of work or materials necessary to build the dam and reservoir. On the contrary, it was to protect the city against claims for loss of - profits in case the estimated quantities were in excess of the amount actually required, and from claims for damage in case the actual quantities exceeded the estimates. In other words, the city, while it had taken every means known to ascertain m advance the actual situation, declined.to guaranty tl e correctness of the estimates of the engineers, but left it to the bidders to satisfy themselves by a personal examination, and other means, as to just what

Finally, it is claimed that the contract is invalid because it provides for the payment to the contractors of $165,892.60 in excess of the lowest bid, which, in effect, is a gift to them to this extent of public moneys which is prohibited by the Constitution of the state. It is true, as already stated,that the bid of the persons to whom the contract was let exceeded, by the amount above stated, alower bid, but the act of 1883 did not require the aqueduct commissioners to let contracts to the lowest bidder. On the contrary, they were authorized to accept the bid “which will, in their judgment, best secure the efficient performance of the work.” Here time was of the essence of the contract. The city was short of water and the contract contemplated that work involving the expenditure of upwards of a million of dollars should be done in a short time. The ability, therefore, of a contractor to do the work and fully perform the terms of his contract, was a very important consideration. The testimony shows that the aqueduct commissioners took this into consideration, and exercised unusual care in passing upon the bids. The engineers reported in favor of the ones to whom the contract was finally awarded, presumably because they had had experience in doing similar work and were prepared, so far as equipment was concerned, to immediately enter upon its prosecution. Besides, their bid was only about $60,000 higher than the average bid; was under the estimate of the chief engineer as to the cost of the work; and was considerably less than the highest bid, which was made by the only other person who had had actual experience in building works of this character.

The judgment appealed from is right, and should be affirmed, with costs. All concur.