Case ID: ad_128/html/0499-01.html
Source: Caselaw Access Project
Author: {"author": "McLaughlin, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Willis Holly, Respondent, v. The City of New York and Others, Appellants.
    First Department,
    November 6, 1908.
    Contract — municipal corporations — specification of article manufactured by patented machinery—fair competition —taxpayer’s action — profits of bidder immaterial.
    An unpatented pipe joint, even though made by patented machinery, is not a patented article within the meaning of section 1554 of the charter of the city of New York prohibiting the advertising for patented articles on letting municipal contracts except, under circumstances giving a fair and reasonable opportunity for competition.
    Where an advertisement for bids on a. municipal contract specified four different types of pipe, the fact that a higher estimate was placed on the efficiency of one variety and thinner plates could be used therewith and the fact that such pipe could only he furnished by a bidder owning patents on machinery for its manufacture do not restrict, fair competition within the meaning of said section of the charter, where it appears that the estimates for the various styles of pipe were made in strict accordance with engineering standards.
    A taxpayer cannot attack such contract merely because the low bidder to whom it is awarded will make a larger profit than a higher bidder.
    As a general rule the court will not interfere with the statutory discretion of municipal officers in letting, a contract in the absence of convincing proof of improper conduct or unless they clearly transgressed their powers.
    Appeal by the defendant, The City of New York and others, from an- order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 31st day of August, 1908, granting an injunction pendente lite.
    
    
      Theodore Connoly, for the appellant The City of New York.
    
      Paul D. Cravath, for the appellant The T. A. Gillespie Company.
    
      G. H. D. Foster, for the respondent.
   McLaughlin, J.:

This appeal is from an order restraining the, defendants during the, pendency of the action from carrying out a certain contract for laying a steel pipe. line, from- Valley Stream to Amityville, L. I, a distance of sixteen miles. The city, through its proper officers, advertised for bids for the construction- of this line. The pipe was required to be seventy-two inches inside diameter and one of four different types designated as “A,” “B,” “C” and “D,” depending upon the method by which the plates were joined, the first three being forms of riveted joint and the fourth a lock bar joint. The contract was awarded to the appellant the T. A. Gillepsie Company, the lowest bidder, upon a bid of $1,879,390 for type “ I) ” pipe — the next lowest bidder being $1,909,052 for type “A” pipe.

This action was brought by a taxpayer, in which he seeks to procure a judgment declaring the acts of the officers of the city in advertising and receiving bids for type “ D ” pipe illegal and void, restraining them from accepting the 'bid of the T. A. Gillespie Company, and enjoining the defendants from carrying out the contract in anyway. The action is based upon section 1554 of the Greater Hew York charter (Laws of 1901, chap. 466), which provides : “ Except for repairs no patented pavement shall be laid and no patented article shall be advertised for, contracted for or purchased, except under such circumstances that there can be a fair and reasonable opportunity for competition, the conditions to secure which shall be prescribed by the board of estimate and apportionment.”

It is urged that type “ D ” or lock bar joint pipe is a patérited article and the conditions to secure competition in bids were not prescribed by the board of estimate and apportionment, and, therefore, if the contract be entered into and carried out the same will constitute an illegal act and the moneys expended a waste of public funds. Type “ J) ” or lock bar joint pipe differs from the other types in that no rivets are used in joining the plates which compose the pipe. The edges of the plates are enlarged and an “ H ” bar clamped over them. This style of pipe is not patented, but it appears that the only rrjachines in use in this country for thickening the edges of the plates and for clamping the “ H ” bar over them, are patented machines, the right to use which for making pipe thirty inches or over in diameter is held by the T..A. Gillespie Company, and that the only company making such pipe in this country is the East Jersey Pipe Company, its licensee, of which it is a large stockholder. Lock bar joint type, though made by patented machinery, cannot be said to be a patented article within the meaning of the section of the charter above quoted, and that being so, the fact that the board of estimate and apportionment did not prescribe the conditions for the bids is immaterial.

The only remaining question necessary for consideration is whether an opportunity was afforded for fair competition. If not, or if unjust discrimination were shown the T. A. Gillespie Company, then the plaintiff would be entitled to the relief sought. What is claimed by the plaintiff in this respect is that an excessively high estimate was placed upon the efficiency of the lock bar joint so that thinner plates could be used for that style of pipe and that the thickness of the plates for that style, under the specifications, was exactly that of the plates manufactured by the East Jersey Pipe Company. The affidavits presented in opposition to the motion fairly tend f'o establish, however, that the estimates for the various styles of pipe were made strictly in accordance with engineering standards, which fact I do not understand is disputed.

But it is further urged in this connection that this saving in metal gave the Gillespie Company a large advantage over its competitors, so that its bid represents a much greater profit and less actual value to the city. All that concerns the city is to have suitable pipe laid at the lowest possible cost, and it is difficult to see why a taxpayer should wish the lowest bid thrown out because the bidder would have a larger profit than a higher bidder.

Our attention has been called to certain cases which it is claimed hold that articles made with patented machinery fall within the prohibition of section 1554 of the charter, There are, doubtless, expressions in some of the opinions delivered in the cases referred to to this effect, but the Court of Appeals seems to have finally settled the question adversely to the plaintiff’s contention in so far as he claims that an opportunity was not afforded for free competition. ( Warren Brothers Co. v. City of New Work, 190 N. Y. 297.) So that, granting all that the plaintiff claims, that the Gillespie Company was the only one who could bid on type “ D ” pipe by reason of its control of the machinery for its manufacture, I am of the opinion that the conditions of the bids were such as to afford a fair and reasonable opportunity for competition*. Bids were advertised for four types of pipe oh what we can only conclude were equal terms, and if it be assumed that type D” is a patented article and the subject of a monopoly, the conditions were similar to those approved by the court in the case just cited, except that the conditions were not prescribed by the board of estimate and apportionment, which I do not think enters into the question in the present case> for the reasons already stated. That case related to bids for patented pavements, and the court said: The dictates of public policy under the circumstances here presented would- seem to require that the owners of patented and unpatented pavements should bid on equal terms. It may well be in this age of invention and progress that the wit of man may devise, if it has not already, a smooth and noiseless pavement that is cheaper and more enduring than any now in use. If this proves to be the fact, there is no reason why the inventor and the city should not profit by this situation.”

It is not possible to force the holder of a patent to assign rights to others so that they may bid against each other. That is not what is meant by bidding on equal terms, for otherwise there could be no equal terms. All that is necessary is to afford to each bidder an opportunity for fair competition, and this appears to have been, done in the present case. The city officials having in charge the letting of the contract in the exercise of the discretion vested in them selected the lowest bidder, and their discretion ought not to be interfered with. It is a general rule that courts will not interfere with the exercise of the discretion vested by statute in. administrative officials in the absence of clear and convincing proof of improper conduct on their part or unless the powers conferred upon them are clearly transgressed. (East River Gas Light Co. v. Donnelly, 93 N. Y. 557; Brady v. Mayor, etc., of N. Y., 112 id. 480; Paul v. City of New York, 46 App. Div. 69.) And where a contract has been awarded for a public improvement the court will not interfere with its performance unless its illegality is clearly established. (Gage v. City of New York, 110 App. Div. 403;).

The moving papers fail to establish even aprima facie case, and for that reason the injunction should be vacated and the city left free to carry out the contract awarded to the T. A. Gillespie Company.

The order appealed from is reversed, with ten dollars costs and disbursements to each appellant appearing by separate counsel, and the motion for an injunction denied, with ten dollars costs to the same parties.

Ingraham, Clarke, Houghton and Scott, JJ., concurred.

Order reversed, with ten dollars costs and disbursements to each appellant appearing by separate counsel, and motion denied, with ten dollars costs to the same parties. Settle order on notice.